- SOL/BTC has reached a pivotal level that suggests a rebound could be imminent.
- But SOL faced intense short-term selling pressure below $200.
Like most altcoins, Solana (SOL) erased almost all of the New Year’s gains following recent macroeconomic headwinds in the United States. It briefly topped $220 during the early January rally, but lost a psychological level of $200 as negative market sentiment intensified.
However, the SOL/BTC ratio, an indicator that gauges the relative price performance of SOL compared to Bitcoin, was at a pivotal point that suggested the altcoin could see a strong rebound.
Is the recovery of the SOL/BTC ratio imminent?
An increase in SOL/BTC implies that SOL has outperformed BTC and vice versa. During the holiday sale, the ratio decreased by 30%, indicating that SOL underperformed BTC.
However, the ratio has now reached long-term trendline support, signaling a potential rebound and outperformance for SOL in the coming weeks. However, an obstacle must first be overcome.
Source: SOL/BTC ratio, TradingView
Despite the recent slight rebound, the ratio was below a key yellow moving average (MA). SOL began its massive cycle when the ratio reclaimed the MA in late 2023. If the trend repeats, such a move could strengthen SOL’s prospects and could outperform BTC again.
At the same time, the altcoin faced intense selling pressure. According to Coinglass data, more than $300 million worth of SOL has been transferred to exchanges for offloading.
This was indicated by the positive net spot flow, showing that more SOL tokens were moved to centralized exchanges to be sold.
Source: Coinglass
The dumping dragged SOL below its annual open of $189, as of press time. It was valued at $185, and the December low of $175 could be within reach if the fall continues.
On the price charts, the main support levels were $175 and $160. On the positive side, SOL Bulls had to break above the trendline resistance to strengthen the market advantage.
Source: SOL/USDT, TradingView
