The SOL/ETH ratio for Solana has reached a three-month low, and analysts predict further decline.

The approval of an Ethereum ETF has led to a shift in liquidity for altcoins, resulting in a 35% drop in SOL/ETH on Binance. Analyst Josh Olszewicz has identified bearish signals: the Ichimoku cloud support level has been breached, and an ascending triangle has failed. SOL/ETH may experience temporary upward movement due to Grayscale fund outflows. Following last month’s approval of an Ethereum ETF, market experts anticipate liquidity flowing from altcoins to ETH. The observed trend aligns with these predictions, as altcoins including Solana (SOL) are currently experiencing a downtrend.

TradingView data shows that Solana’s USD value relative to Ethereum has declined by 35% on Binance, reaching 0.038. Technical analysis by cryptocurrency trader and analyst Josh Olszewicz suggests a bearish outlook for SOL/ETH, with further capital outflows expected.

Olszewicz explains that SOL/ETH is “breaking down,” referring to the breach of the Ichimoku cloud’s widely used bearish support level.

The Ichimoku cloud chart, developed by Japanese journalist Goichi Hosada, includes five indicators to identify potential market trends. These components consist of Leading Span 1/2, the Tenkan-Sen (T) conversion line, the Kijun-Sen (K) baseline, and the Lagging Span.

The crosspoint below the Ichimoku cloud in the SOL/ETH candlestick chart resembles a pattern often associated with a shift in bearish sentiment.

Additionally, the failure of the ascending triangle in the ETH/SOL candlestick chart further highlights its bearish trend. Ascending triangles, represented by an upward support line and a horizontal resistance line, typically indicate potential upward trends. Conversely, breaking below the support line of this pattern signals reversal and stronger bearish pressure.

Nevertheless, Olszewicz believes that outflows from the Grayscale Ethereum Trust could trigger a temporary rebound for SOL/ETH. Similar effects were observed after the launch of a Bitcoin ETF in the United States, during which the Grayscale Bitcoin Trust experienced significant capital outflows. Therefore, trading of spot ETFs in July may drive this dynamic.

Sentiment: Neutral