Solana rally incoming? – How Ethereum could trigger SOL price surge
There was a slight uptick in profit-taking amid SOL's weekly 8% pump
Key Takeaways
Solana could be primed for a massive breakout if historical lead by ETH and subsequent rotation repeat. However, the market was ETH-focused as of the time of writing.
Solana [SOL] rallied 8% this week, and this could just be the beginning of a larger upswing if Ethereum [ETH] traction holds.
Swissblock, a crypto insights platform, issued a bullish rating for SOL, stating that it always benefits from ETH rallies and broader altcoin season momentum supports its incoming surge.
The analytics firm added,
“Rotation begins. Solana’s moment returns. When ETH leads, SOL accelerates. The rotation is setting up to be strong.”
Per the attached chart, SOL fronted impulsive rallies in early and late 2024 (shaded areas 1 & 2), followed by an ETH uptick.
A similar pattern has been observed in July, raising the odds of another surge if the past trend repeats itself.
Altcoin season suggests…
The shift in altcoin momentum also supported the above bullish outlook.
After Bitcoin [BTC] jumped to a record high last week and BTC dominance waned, the altcoin shift began picking up momentum.
In fact, BTC dominance has dropped from 66% to 62.4% since late June, further supporting the building altcoin season.
Based on the altcoin market cap, Swissblock noted that we could be in ‘Wave 5’, the most explosive phase for the sector.
But the expected surge could mark the likely peak for the cycle, highlighted Swissblock.
“Historically, Wave 5s in crypto unfold fast and vertical — this could mirror 2017 or 2021. Altseason may be here — but it could also be the last leg before the cycle peaks.”
SOL/ETH ratio drops 44%
Meanwhile, the SOL/ETH ratio painted a different picture. Since April, SOL has lagged behind ETH by over 44% and broken below this cycle ascending channel.
In short, the market was interested in ETH than SOL, at least in the past few weeks.
If the trend remains intact for the coming weeks or months, then ETH may steal the show from SOL.
That said, large players were bullish on SOL’s prospects, as shown by Galaxy Digital scooping $55 million worth of SOL.
But that was slight profit-taking from this week’s rally. Glassnode showed that profit-taking hit an average of $400 million per day.
Even so, this was still relatively too low compared to the profitability of $1B-$2.4B that marked the 2024 local peaks.
Overall, the SOL could follow ETH steps and extend its recovery above $180 if the historical trend repeats.
The profit-taking was rising but relatively muted to cap the rally. However, the market was still heavily leaning on ETH at press time.
