Over the past two years, Ethereum (ETH) has been the clear winner in terms of performance when compared to Solana (SOL). However, a technical analyst known as “CryptoGodJohn” on X believes that this dynamic is about to change. By examining the candlestick arrangement of the SOLETH chart on the weekly chart, the analyst suggests that now might be the opportune time for traders to consider swapping their ETH for SOL. While it’s uncertain whether this prediction will come true, it’s evident that the path of least resistance is currently pointing northwards in terms of price movement.
Currently, SOL has experienced a 71% increase in value against ETH since June. Furthermore, when taking a closer look at SOLETH prices, it becomes apparent that they are at a critical resistance level. Although trading volumes are still relatively light compared to those seen in late Q2 2023, there is a noticeable shift in sentiment favoring SOL bulls. This surge in the latter half of the year could potentially signal a significant move for SOL.
At present, the SOLETH is hovering around the 0.0134 ETH level, which is a crucial liquidation level that was last tested in July and January 2023. If buyers push harder and manage to lift the coin above the 0.0162 ETH level, accompanied by rising trading volumes, it would confirm the mid-July bullish trend. In such a scenario, SOL could see further gains reaching the 0.0265 ETH level and potentially returning to the September 2022 zone. Despite this optimistic outlook, it remains unclear how prices will react at current spot levels.
Currently, the SOLETH chart on the weekly timeframe is experiencing rejection. The current bar exhibits a long upper wick, suggesting the possibility of a sell-off on lower time frames. Additionally, it’s important to note that SOLETH prices are still influenced by the bearish candlestick from early November 2022. This particular candlestick was characterized by wide-ranging price movements and high trading volumes, indicating an influx of fear-induced conversions from SOL to ETH. Notably, this coincided with the collapse of the once-popular cryptocurrency exchange, FTX.
In 2021, FTX and Alameda Research, the trading wing connected to FTX’s CEO, Sam Bankman-Fried, invested a significant $100 million in the Solana Foundation. It was estimated that FTX and Alameda Research jointly controlled over 50 million SOL. Following FTX’s bankruptcy filing, concerns arose within the community that these 50 million SOL would be sold to repay creditors. Whether SOL will be able to recover from the post-FTX collapse drop or not is still uncertain. However, if a reversal were to occur, SOL could potentially gain at least 50% against ETH.
As the performance of Ethereum and Solana continues to evolve, there are indications that a shift may be on the horizon. While ETH has enjoyed significant outperformance over the past two years, the current candlestick arrangement on the SOLETH chart suggests that SOL may be poised for a rally. Traders are advised to stay vigilant and monitor key resistance levels and trading volumes as they make decisions regarding their portfolios. Only time will tell whether the predicted shift in performance will come to fruition, but it is clear that the sentiment is beginning to favor SOL bulls.