Coinspeaker
Solana-Ether Ratio Drops 35%, Hitting Lowest Level Since March
Solana (SOL) and Ethereum (ETH) are facing challenges, with their value relationship hitting a three-month low. This drop in the SOL/ETH ratio raises concerns about Solana’s future performance, especially with the potential launch of a spot ether ETF.
In May 2024, Speculation around a spot ether ETF could cause investors to move their money away from altcoins like Solana. The prediction is coming true, with the SOL/ETH ratio dropping by nearly 35% on Binance. As of June 20, 2024, the ratio is at 0.038, its lowest since mid-March.
Solana Price Faces Downward Trend
Crypto analyst Josh Olszewicz believes the recent price action positions Solana for further losses. He points to critical technical developments on the SOL/ETH chart, highlighting the token’s breach of the Ichimoku Cloud support as a key bearish indicator.
Photo: TradingView
The Ichimoku Cloud, developed by Japanese journalist Goichi Hosada, is a technical analysis tool that utilizes five lines to identify trends. When the price falls below the cloud, as seen in the SOL/ETH chart, it typically signifies a bearish shift in market sentiment.
Further bolstering the bearish outlook is the breakdown of a bullish chart pattern known as the ascending triangle. This pattern is characterized by a rising support line and a horizontal resistance line, typically indicating a continuation of the preceding uptrend. However, the SOL/ETH pair’s plunge below the support line suggests a reversal in the trend.
While the immediate outlook appears bleak, Olszewicz acknowledges the possibility of temporary upswings in the SOL/ETH ratio. Potential outflows from the Grayscale Ethereum Trust could fuel these rallies, similar to the situation observed with the Grayscale Bitcoin Trust following the introduction of spot bitcoin ETFs in the U.S.
Olszewicz also suggests a potential scenario where increased investor interest in Solana could arise if investment giant BlackRock decides to launch a SOL-based ETF. However, he tempers expectations by acknowledging the unlikelihood of this scenario.
Spot Ether ETFs Impact SOL/ETH
The anticipated launch of spot ether ETFs in July could further dampen ETH price gains, potentially impacting the SOL/ETH ratio. Additionally, the absence of a BlackRock ETF could exacerbate the downtrend.
Notably, the potential outflows from the Grayscale Ethereum Trust could affect Ethereum’s bullish momentum. In the end, the success of spot ether ETFs and BlackRock’s decision on its ETF will likely be crucial in determining how Solana performs against Ethereum.
Solana-Ether Ratio Drops 35%, Hitting Lowest Level Since March
