Ethereum ETF approval prompted an altcoin liquidity shift, with SOL down 35% vs ETH on Binance.
Olszewicz’s analysis shows bearish signals: Ichimoku cloud breach, ascending triangle failure.
SOL/ETH may temporarily rally on Grayscale outflows.
Following the approval of the Ethereum ETF last month, market experts anticipated a potential liquidity outflow from the altcoin market into ETH. Observable trends have aligned with these predictions, as altcoins, including Solana (SOL), are experiencing a downtrend.
TradingView data shows that Solana’s USD value relative to Ethereum has dropped by 35% to 0.038 on Binance. Technical analysis by crypto trader and analyst Josh Olszewicz also indicates a bearish outlook and further outflows for the SOL/ETH pair.
Olszewicz explained that “SOL/ETH is rolling over,” referencing the breakdown of bearish support levels on the Ichimoku cloud, a widely used trend indicator in the financial market.
The chart, developed by Japanese journalist Goichi Hosada, consists of five indicators to identify underlying market trends. These components include Leading Span 1/2, Conversion Line or Tenkan-Sen (T), Base Line or Kijun-Sen (K), and Lagging Span.
The crossing below the Ichimoku cloud, a similar pattern observed in the SOL/ETH chart, often represents a shift towards bearish sentiments.
Moreover, the failure of the ascending triangle ETH/SOL chart further underscores its bearish trend. Ascending triangles, represented by a rising support line and a horizontal resistance line, are generally bullish patterns that indicate potential upward movement. Conversely, a breach below the pattern’s support line signals a reversal, suggesting stronger bearish pressure.
Nonetheless, Olszewicz believes outflows from Grayscale Ethereum Trust could trigger a temporary rally in the SOL/ETH pair. A similar impact was observed following the launch of Bitcoin ETFs in the U.S., during which Grayscale Bitcoin Trust saw significant outflows. Therefore, the expected trading of spot ETFs in July could trigger such a dynamic.
Meanwhile, Olszewicz considers an unlikely scenario in which SOL could attract interest if BlackRock were to pursue a SOL ETF. He stated, “Monitoring for ETH outflows pushing this pair higher, temporarily—Larry SOL ETF application, unlikely otherwise, this pair should continue to decline if the ETH ETF is successful.“
The post Solana’s SOL/ETH Ratio at 3-Month Low, Analyst Expects Further Decline. appeared first on Coin Edition.
