Often referred to as the “Ethereum Killer,” Solana (SOL) has showcased remarkable strength during the current bull market. Its claim to this title is not just based on market capitalization, but also on its consistent presence among the top performers week after week, outshining the relatively stable Ethereum (ETH).
During this market cycle, SOL has been thriving as Bitcoin (BTC) reaches crucial price levels, attracting investors who aim to diversify their portfolios to manage risks – a position that ETH previously held.
SOL Surpasses ETH
Despite ETH’s dominant market cap of $300 billion, far exceeding SOL’s $81 billion, recent trends indicate a 5% increase in SOL’s market cap while ETH has faced a 3% decline.
This shift is significant, especially with Bitcoin’s recent surge to almost $70K, representing a 16.67% increase in just ten days.
Traditionally, a heated market prompts investors to move funds into large-cap altcoins, seeking safer investment options.
Historically, when BTC reached its peak, ETH experienced substantial gains. However, in this cycle, SOL seems to have taken the lead.
With BTC hitting resistance and SOL marking a 4% daily gain – its highest in a week – the narrative began to shift.
As BTC faced a slight pullback, ETH experienced a 3% decline, unlike SOL, which continued its upward trend after breaking the $160 barrier.
As SOL trades at $173, caution is advised as the Relative Strength Index (RSI) signals overbought conditions. With an 83% surge in the past two weeks, a reversal may be impending.
Could this refocus investor interest on ETH?
A Potential Reversal Looms Ahead with a Caveat
An analysis by CryptoCrypto previously highlighted ETH’s retracement as a strategic move by traders to shake out weak positions.
This pullback could pave the way for a breakout, drawing in fresh buyers and encouraging whales to accumulate, potentially propelling ETH beyond $2,700.
However, ETH’s rally hinges on SOL’s performance. While ETH might be gearing up for a short-term turnaround as it tests support levels, its breakout depends on closely monitoring SOL’s metrics.
Over the last month, Solana has witnessed a 175% surge in daily active addresses, while Ethereum saw only a modest increase.
This spike in Solana’s activity is no coincidence. Leveraging its high transaction speed and lower fees, SOL has strategically positioned itself to outshine ETH in this race.
Thus far, this strategy has paid dividends, with SOL capitalizing on ETH’s rising fees and attracting significant attention from BTC investors.
In essence, SOL’s prospects seem brighter than ETH’s, positioning it as a premier altcoin for the foreseeable future.
While a correction might dip SOL below $170, its potential to outperform ETH remains intact, potentially challenging ETH’s journey to $2.7K.