The SOL/ETH ratio has plummeted 35% over the past month, marking its lowest point since March 13.
Key Points:
- The SOL/ETH ratio has decreased by 35% in one month, now at its lowest since March 13.
- Technical indicators have turned bearish, suggesting more declines ahead.
- Market behavior aligns with predictions that spot ether (ETH) ETF speculation would draw funds from altcoins like Solana (SOL) into ether.
According to CoinDesk, the SOL/ETH ratio, which reflects the price of Solana relative to Ethereum, has fallen nearly 35% to 0.038 on Binance. This drop is consistent with expectations that the approval of spot ether ETFs would attract investment away from altcoins.
Crypto analyst Josh Olszewicz noted that the ratio is showing significant bearish signals, including breaking below the Ichimoku cloud support on the technical chart. This indicator, developed by Goichi Hosada in the 1960s, uses multiple lines to gauge market trends. A crossover below the cloud indicates a bearish market trend.
The SOL/ETH chart also shows a breakdown of an ascending triangle pattern, typically a bullish indicator formed by a rising support line and a horizontal resistance line. The failure of this pattern suggests a shift to a bearish trend.
Olszewicz anticipates that while the overall trend remains downward, there may be temporary rallies, especially if there are significant outflows from the Grayscale Ethereum Trust following the debut of spot ETFs. This dynamic was observed in the bitcoin market, where substantial outflows from the Grayscale Bitcoin Trust ETF occurred after the launch of spot bitcoin ETFs.
Finally, Olszewicz speculates that Solana might see interest if a major financial entity like BlackRock applies to launch an ETF tied to SOL, although he deems this scenario unlikely. For now, the SOL/ETH pair is expected to continue its decline if the ETH ETF proves successful.