Solana’s Connection to Bitcoin Has Led to Price Capitulation – BitRss – Crypto World News

Solana’s price continues to fall, increasing losses for investors and reinforcing the ongoing bearish trend in the broader crypto market.

Despite periods of recovery in recent months, the altco is now facing increasing downward pressure. The close correlation with Bitcoin could be a key factor driving Solana’s latest capitulation.

Solana depends on Bitcoin

The correlation between Solana and Bitcoin is currently at an exceptionally high 0.97, indicating that the price movements of SOL ($157.57) closely match those of the world’s largest cryptocurrency. This correlation means that any weakness in Bitcoin’s market performance will directly impact Solana’s trajectory.

With Bitcoin hovering around the $100,000 level and struggling to move higher, Solana’s price is at continued risk of decline.

Bitcoin’s lack of bullish momentum translates into stagnation for SOL, limiting the token’s potential for independent growth and raising concerns about its near-term stability.

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From a macro perspective, Solana’s Net Unrealized Profit and Loss (NUPL) measure has entered the capitulation zone, indicating investor caution.

Historically, dips in this zone have marked crucial turning points for Solana, as investors often hold at a loss rather than sell, further slowing the downtrend.

Currently, Solana’s NUPL is hovering just within the capitulation margin. However, given its strong correlation with Bitcoin, the metric could deepen if BTC ($102,058.00) weakness continues.

Ironically, this dip could create the conditions for a recovery, as capitulation phases historically preceded the accumulation and recovery of SOL.

Solana NUPL. Source: Glassnode

SOL price may bounce back

At the time of writing, Solana is trading at $157, extending a month-long downtrend. The token’s performance remains dependent on Bitcoin’s movements, making further declines likely if BTC fails to stabilize.

In the short term, Solana could face additional bearish pressure that could see it slide towards $150 or even $146. Such a decline could lead to renewed buying interest, allowing SOL to recover towards $163 and possibly $175 as confidence returns.

Solana price analysis. Source: TradingView

However, if Bitcoin’s price continues to deteriorate, Solana’s downtrend could intensify. A break below $146 could push the token towards $140, widening losses for investors and negating any bullish recovery thesis for the near future.

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