The cryptocurrency market has witnessed Ethereum (ETH) outperforming Solana (SOL) in the weekly chart for the past two years. However, according to technical analyst “CryptoGodJohn,” this trend is about to change, especially considering the candlestick arrangement of the SOLETH chart on the weekly chart. While this may seem like the perfect opportunity for traders to swap their ETH for SOL, it is important to critically assess the situation and consider all factors before making any decisions.
Examining the price charts, it becomes evident that the path of least resistance seems to be in favor of Solana. SOL has experienced a significant 71% increase compared to ETH since June, indicating a strong bullish sentiment towards the altcoin. Furthermore, the SOLETH prices are currently hovering around crucial resistance levels. Although trading volumes are relatively low compared to the figures observed in late Q2 2023, there is a noticeable shift in sentiment favoring SOL bulls. The impressive surge witnessed in the second half of the year could potentially be a testament to SOL’s future growth.
The current level of SOLETH stands at 0.0134 ETH, a liquidation level that was last retested in July and January 2023. If buyers push harder and manage to lift the coin above the 0.0162 ETH level while accompanied by rising trading volumes, the bulls of mid-July will be confirmed. In such a scenario, Solana might witness an extended uptrend towards the 0.0265 ETH level, reclaiming the prices from September 2022. However, despite traders’ optimism, it is essential to acknowledge the uncertainty surrounding spot prices and how they might react.
Presently, the SOLETH in the weekly chart is facing rejection. The current bar shows a long upper wick, indicating a possible sell-off in lower timeframes. Additionally, the prices of SOLETH continue to be defined by the early November 2022 bearish candlestick. This bearish candlestick showcases wide-ranging price movements and high trading volumes, signaling a rapid conversion of SOL to ETH during a moment of fear.
It is important to note that this period coincided with the collapse of FTX, a once-popular cryptocurrency exchange. In 2021, FTX and Alameda Research invested $100 million in the Solana Foundation, with FTX alone controlling over 50 million SOL. As FTX filed for bankruptcy, the community speculated that the 50 million SOL would be sold to repay creditors. Whether Solana can overcome the negative impact of the post-FTX collapse downturn remains uncertain. However, a potential reversal in this trend could result in SOL gaining at least a 50% advantage over ETH.
The cryptocurrency market is dynamic and subject to changes in sentiment and market conditions. While the current analysis suggests that Solana might outperform Ethereum in the coming years, it is crucial for traders to exercise caution and carefully evaluate all factors before making any investment decisions. It is always advisable to consult with financial advisors and conduct thorough research to ensure informed decision-making in the volatile cryptocurrency market.