The SOL/ETH trading pair is moving sideways within a narrow range as the crypto market stabilizes following the rollercoaster in the first two weeks of August. Meanwhile, Ethereum price and Solana price struggled above key support areas on Friday as bulls battled to resume the uptrend.

Solana Price Sets Bearish Tone As Ethereum Staking Rises

A massive 16,000 ETH injection into the staking contract on August 14 confirmed a new pattern that investors are continually taking advantage of price volatility and correction to increase their staked holdings.

According to the on-chain analysis platform CryptoQuant, recent spikes in staking inflows coincided with noticeable drops in ETH price. The same thing happened during price volatility periods in July. If this trend continues, it might be prudent to avoid trading longs whenever there is heightened volatility in staking inflows.

Ethereum staking inflows | CryptoQuant

The SOL/ETH currency pair has been unable to uphold an uptrend for an extended period of time since peaking at the 0.06438 level on August 8. Looking back at the chart’s history, immense liquidity from the previous 0.048 level, in conjunction with positive sentiment as Brazil’s Security and Exchange Commission (SEC) approved the first Solana ETF in the country, boosting the remarkable uptrend.

Earlier this week, the SOL/ETH trading pair bounced off support provided by the 200-day Exponential Moving Average (EMA) at 0.0531. A short-term trend line as per ETH price prediction contributed to this support, allowing bulls to gain partial control of the trend.

However, with the US CPI data failing to move the market upwards on Wednesday, SOL/ETH hit a snag at 0.0555, a resistance highlighted by the 50-day EMA. Although July’s CPI data reinforced the easing inflation trend, Core CPI steadied at 3.2% annually, dampening optimism for a 50 basis point rate cut in September in favor of a 25 basis point cut.

Cryptocurrencies, including Solana price and Ethereum price, have since struggled to recoup incurred losses. SOL/ETH shows signs of a potential drop to the 200-day EMA support, where bulls will increase long positions amid optimism for a bigger leg up.

SOL/ETH price chart | Tradingview

It is worth noting that a recovery is possible if SOL/ETH bounces off the 61.8% Fibonacci ratio at 0.05381. SOL price forecast depicted that more upside movement should be expected above the trend line resistance, the 20-day EMA, and the 50-day EMA. Key target areas to the upside include the 38.2% Fibonacci level at 0.058 and the recent peak at 0.06438. Solana price will react positively to these movements, paving the way for a breakout toward $200.

The post SOL/ETH Price Analysis: Why Solana Price Underperforms As ETH Staking Soars appeared first on CoinGape.

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Filed under: News - @ August 16, 2024 1:24 pm