Solana-Ether Ratio Hits 3-Month Low, Analyst Anticipates Further Losses

A month ago, CoinDesk discussed how spot ether (ETH) ETF speculation could spur an outflow of money from altcoins, including Solana’s SOL token and into ether.
The market has since behaved as expected, with the ratio between SOL and ETH’s dollar-denominated prices falling nearly 35% to 0.038 on Binance, the lowest since March 13, according to charting platform TradingView.
The decline has put the bears in control and further losses could be seen, according to crypto trader and analyst Josh Olszewicz.
“SOL/ETH [is] rolling over,” Olszewicz said on X, noting key bearish developments on the technical chart like the penetration of the Ichimoku cloud support.
Japanese journalist Goichi Hosada created the Ichimoku Cloud in the late 1960s. The indicator comprises five lines: Leading Span A, Leading Span B, Conversion Line or Tenkan-Sen (T), Base Line or Kijun-Sen (K) and a lagging closing price line. The difference between Leading Span A and B makes up the cloud, which is used to identify broader trends.
Crossovers below the cloud, as in SOL/ETH’s case, represent a bearish shift in the market trend.
The SOL/ETH chart also shows a failure of a usually bullish pattern called the ascending triangle, identified by a rising support line and a horizontal resistance line.
Ascending triangles develop when buyers are dominant and usually pave the way for extending the preceding uptrend. However, the SOL/ETH pair has dived below the ascending trendline support line, signaling a bearish trend change.
Though the path of least resistance is to the downside, the pair may see temporary recovery rallies should there be outflows from the Grayscale Ethereum Trust, according to Olzewicz.
Note that in the month following the debut of spot bitcoin ETFs in the U.S., the Grayscale Bitcoin Trust ETF saw $6.5 billion in outflows, offsetting substantial inflows into the other funds. Following the expected debut of spot ETFs in July, a similar dynamic might be seen in the ether market, keeping ETH gains in check.
Lastly, per Olszewicz, SOL may find takers if BlackRock applies to launch an ETF tied to SOL, although Olzewicz says the ETF giant is unlikely to do so.
“Watching for: – ETHE outflows pushing this pair higher, temporarily – Larry SOL ETF application, unlikely otherwise, this pair should continue to decline if the ETH ETF is successful,” Olszewicz said.
Edited by Parikshit Mishra.
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Omkar Godbole is a Co-Managing Editor on CoinDesk’s Markets team.