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There has been considerable commentary on the underperformance of ETH, but now SOL appears set to follow a similar trajectory.

A few weeks ago, I noted that ETH is reflecting trends from the Intel stock chart, achieving what Intel has done over 50 years within a decade.

SOL/BTC vs ETH/BTC

The SOL/BTC ratio is closely mirroring the ETH/BTC ratio. Below is a graph depicting the prices of ETH (green) and SOL (purple) in relation to BTC:

• The SOL/BTC data begins 10 months into its trading history, starting from February 2021 instead of April 2020.
• SOL/BTC has been adjusted to align with ETH, as if both assets launched simultaneously.
• ETH/BTC data is compressed by 2x, condensing two days of price action into one.

The plotting reveals that the ETH and SOL bitcoin ratios follow remarkably similar patterns. Both assets saw significant initial price discovery spikes against BTC during their first bull markets—ETH in 2017 and SOL in 2021—before both experienced declines during bear markets.

After this initial boom, the subsequent performance against bitcoin has been underwhelming. The ETH/BTC ratio remained mostly stagnant between May 2021 and January 2023, ultimately dropping over 60%. SOL/BTC has also been largely unresponsive from December 2023 to the present, reflecting ETH/BTC’s position in mid-2023 before it fell from 0.07320 BTC to 0.028 BTC over the next 18 months.

If SOL is indeed destined to mimic ETH’s trajectory against BTC, a significant rise in ETH’s price against the US dollar would likely impact SOL positively.

Current Market Conditions

On the downside, ETH has technically entered a bear market. This is according to a straightforward definition: a bear market occurs when a coin’s year-on-year returns are negative.

This definition also applied to bitcoin’s recent bear market, which lasted 490 days from February 2022 to June 2023, marking the longest on record. For most of this period, ETH’s year-on-year returns remained negative.

Notably, ETH’s year-on-year returns (excluding staking) turned negative again ten days ago on February 14, marking the first such instance since June 2023. This could signal the onset of a new bull market or the final phases of the previous bear market, depending on one’s perspective.