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The crypto universe is an arena where each asset fights for its place at the top. Recently, Solana (SOL), often hailed as a serious contender against Bitcoin (BTC) and Ethereum (ETH), has shown signs of weakness. But what lies behind this dynamic? An analysis of on-chain data, particularly that shared by Glassnode, offers unexpected answers.
Solana’s performance against Bitcoin and Ethereum: an unequal battle?
In the fourth quarter of 2024, Solana was still a dream. With performances far surpassing those of Bitcoin and Ethereum, SOL seemed unstoppable.
However, early December marked a turning point. Ethereum regained the lead with an impressive 28% increase over 30 days, followed by Bitcoin (+18%), while Solana stagnated with a meager +3%. This brutal drop left investors perplexed.
Why this sudden turnaround? Glassnode experts put forward an explanation related to capital flows.
The “Realized Cap” indicator, a sophisticated measure assessing the total amount invested in an asset according to its acquisition price, reveals intriguing trends. Between September and December, Solana had benefited from massive inflows of capital, even surpassing Bitcoin and Ethereum. But as soon as these flows dried up, SOL’s momentum evaporated, leaving the field clear for the two historical leaders.
Capital flows and investor psychology
The Realized Cap tells more than just a story of numbers; it also reflects the mindset of investors.
Data shows that at the moment when Bitcoin and Ethereum continued to attract capital, Solana was entering a consolidation phase. This stagnation is not just a technical issue; it reveals a change in market perception.
While Bitcoin is seen as a store of value and Ethereum as the backbone of smart contracts, Solana still seems to be searching for its identity. Its surging increases, followed by sharp slowdowns, reflect investors’ fluctuating confidence.
In December, this fragility was brought to light: capital inflows into SOL dropped, while Bitcoin and Ethereum continued to capitalize on their safe-haven status.
Meanwhile, price performances only reinforce this cycle. While Bitcoin and Ethereum register spectacular increases, Solana operates within a narrow channel around $221, confirming that its momentum is losing steam.
The battle between Bitcoin, Ethereum, and Solana is far from over. Solana has proven in the past that it can rival giants, but its recent stagnation serves as a reminder of how fragile market equilibrium is. To reclaim lost ground, SOL will need not only to restore its capital flow momentum but also to strengthen its position within the crypto ecosystem. For now, Bitcoin is leading the dance.
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Fasciné par le bitcoin depuis 2017, Evariste n’a cessé de se documenter sur le sujet. Si son premier intérêt s’est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l’état du secteur dans son ensemble.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
