Solana (SOL) vs Bitcoin (BTC) Trading Performance Shows Signs of Weakening, Key Metrics Indicate a Potential Shift Towards a Bear Market

Solana's [SOL] trading performance against Bitcoin [BTC] has shown signs of weakening, with key metrics indicating a potential shift towards a bear market.

Solana’s (SOL) trading performance against Bitcoin (BTC) has shown signs of weakening, with key metrics indicating a potential shift towards a bear market.

Here's a closer look at the market Trends and analysis.

Solana's (SOL) relative strength against Bitcoin (BTC) has been a subject of interest, especially considering Solana's outperformance during previous bull markets. However, recent data suggests a weakening trend in SOL/BTC.

As of February 8, 2025, the SOL/BTC trading pair has declined from a high of 0.0024 BTC to approximately 0.0020 BTC, indicating a decrease in Solana's demand relative to Bitcoin. This shift is evident in the trading chart, which shows a downtrend.

A closer examination of the market reveals that the SOL/BTC pair has experienced a notable downtrend since mid-January 2025. This decline is further highlighted by increasing selling pressure and decreasing trading volumes.

The trend differs from Solana's outperformance during previous bull markets, which saw SOL/BTC rallying to new highs. However, the current market conditions are more favorable to Bitcoin, which has led to a shift in momentum.

Despite the overall downtrend, some key metrics are showing signs of a possible short-term recovery. The Money Flow Index (MFI) has recently shown an uptick, indicating a strong buying pressure relative to selling pressure.

This divergence from the price trend suggests that some buyers are cautiously re-entering the market, which could lead to a temporary rebound in demand for Solana.

However, the Sharpe Ratio for the SOL/BTC pair is currently at neutral or negative, indicating reduced risk-adjusted performance. This metric measures the excess return per unit of risk, and a lower or negative Sharpe Ratio suggests that investors are not being adequately compensated for the risk they are taking on SOL/BTC.

Additionally, the Normalized Risk Metric (NRM) for SOL/BTC is currently in the mid-band, indicating a neutral market equilibrium. This contrasts with a strong bullish NRM for ETH/BTC, which has been attracting institutional investors.

Solana's volatility has attracted more speculative interest, while Ethereum's stability and risk-adjusted returns have appealed to a broader range of investors.