- SOL/BTC has been in decline since mid-January 2025, displaying weakening demand
- Sharpe Ratio and NRM metrics indicated rising volatility and potential threat for Solana
Solana’s [SOL] battle towards Bitcoin [BTC] has been an exhilarating trip, however experts suggest that the tide could also be turning. As Solana faces growing strain, 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 great 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 situations. In reality, the information highlighted a transparent downtrend since mid-January 2025, with the pair dropping from its excessive of 0.0024 BTC to its press time degree close to 0.0020 BTC.
A hike in promoting strain and falling buying and selling volumes have exacerbated the drop, signaling weaker demand relative to Bitcoin.
Supply: TradingView
Traditionally, Solana has proven durations of robust outperformance towards BTC. Nonetheless, its present decline aligns with market corrections and fading momentum.
The MFI, as an illustration, confirmed a latest uptick, alluding to a doable short-term restoration as consumers cautiously re-enter the market.
SOL/BTC – Sharpe ratio insights
The info 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.
Nonetheless, sharp declines on this ratio usually 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 appeared to be according to the latest value weak point. The sample pointed to market hesitation, with buyers cautious about allocating closely to SOL throughout unsure durations. Until a notable enchancment in risk-reward dynamics happens, sustained outperformance towards Bitcoin could be unlikely within the quick time period.
Decoding market tendencies
The Normalized Danger Metric affords a extra nuanced perspective although. The NRM oscillates inside a gradient band, with greater values in crimson indicating elevated threat and decrease values in blue signaling decreased threat ranges.
Supply: Alphractal
Traditionally, value peaks coincide with elevated NRM ranges, as seen in mid-2021, suggesting overbought situations and heightened market euphoria. Conversely, dips into the decrease bands have marked accumulation phases, comparable to early 2023, signaling decreased market threat.
At present, the NRM is hovering within the mid-band, reflecting a extra cautious equilibrium. Which means the market is neither overly exuberant nor fearful, hinting at a consolidation part for SOL relative to Bitcoin.
Evaluating SOL/BTC to ETH/BTC
When juxtaposing SOL/BTC with ETH/BTC, distinct divergences emerge of their market conduct. Whereas ETH/BTC historically mirrors broader market sentiment as a bellwether for altcoin efficiency, SOL/BTC underlines greater volatility, reflecting Solana’s place as a high-beta asset.
Ethereum’s stronger risk-adjusted returns highlighted its attraction to institutional and long-term buyers. Quite the opposite, Solana’s sharper fluctuations pointed to larger speculative curiosity, amplifying each upside potential and draw back dangers.
ETH/BTC has maintained strong assist 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 concern, making it extra liable to speedy shifts pushed by whale exercise and ecosystem developments.
Learn Solana’s [SOL] Price Prediction 2025–2026
