- SOL/BTC has been in decline since mid-January 2025, exhibiting weakening demand
- Sharpe Ratio and NRM metrics indicated rising volatility and potential threat for Solana
Solana’s [SOL] battle in opposition to Bitcoin [BTC] has been an exhilarating journey, however experts suggest that the tide could also be turning. As Solana faces rising stress, a number of key metrics are hinting at a possible bear marketplace for SOL/BTC, harking back to the struggles Ethereum [ETH] confronted in its personal battle with Bitcoin.
With momentum slowing and bearish indicators mounting, are the nice instances for Solana coming to an finish?
State of the SOL/BTC market
The SOL/BTC buying and selling pair has seen a decline in latest weeks, indicative of broader market circumstances. In reality, the info highlighted a transparent downtrend since mid-January 2025, with the pair dropping from its excessive of 0.0024 BTC to its press time stage close to 0.0020 BTC.
A hike in promoting stress and falling buying and selling volumes have exacerbated the drop, signaling weaker demand relative to Bitcoin.
Supply: TradingView
Traditionally, Solana has proven intervals of robust outperformance in opposition to BTC. Nevertheless, its present decline aligns with market corrections and fading momentum.
The MFI, as an illustration, confirmed a latest uptick, alluding to a attainable short-term restoration as patrons cautiously re-enter the market.
SOL/BTC – Sharpe ratio insights
The information highlighted the connection between the SOL/BTC pair’s value and its Sharpe Ratio. Traditionally, peaks within the Sharpe Ratio align with value surges, as seen in mid-2021 and mid-2023.
Nevertheless, sharp declines on this ratio typically sign heightened volatility and threat – Coinciding with value downturns.
Supply: Alphractal
On the time of writing, the Sharpe Ratio was hovering close to impartial or destructive territory, reflecting diminished risk-adjusted efficiency for SOL relative to Bitcoin.
This gave the impression to be in keeping with the latest value weak point. The sample pointed to market hesitation, with traders cautious about allocating closely to SOL throughout unsure intervals. Until a notable enchancment in risk-reward dynamics happens, sustained outperformance in opposition to Bitcoin could be unlikely within the quick time period.
Decoding market developments
The Normalized Threat Metric gives a extra nuanced perspective although. The NRM oscillates inside a gradient band, with increased values in purple indicating elevated threat and decrease values in blue signaling diminished threat ranges.
Supply: Alphractal
Traditionally, value peaks coincide with elevated NRM ranges, as seen in mid-2021, suggesting overbought circumstances and heightened market euphoria. Conversely, dips into the decrease bands have marked accumulation phases, corresponding to early 2023, signaling diminished market threat.
At present, the NRM is hovering within the mid-band, reflecting a extra cautious equilibrium. Because of this the market is neither overly exuberant nor fearful, hinting at a consolidation section for SOL relative to Bitcoin.
Evaluating SOL/BTC to ETH/BTC
When juxtaposing SOL/BTC with ETH/BTC, distinct divergences emerge of their market habits. Whereas ETH/BTC historically mirrors broader market sentiment as a bellwether for altcoin efficiency, SOL/BTC underlines increased volatility, reflecting Solana’s place as a high-beta asset.
Ethereum’s stronger risk-adjusted returns highlighted its enchantment to institutional and long-term traders. Quite the opposite, Solana’s sharper fluctuations pointed to higher speculative curiosity, amplifying each upside potential and draw back dangers.
ETH/BTC has maintained strong help ranges too, reinforcing its standing as a portfolio anchor. In the meantime, SOL/BTC’s frequent excursions into threat zones imply shorter cycles of euphoria and worry, making it extra liable to fast shifts pushed by whale exercise and ecosystem developments.
Learn Solana’s [SOL] Price Prediction 2025–2026
