Recent analysis from on-chain analytics firm Glassnode highlights why Solana (SOL) has struggled to keep pace with Bitcoin (BTC) and Ethereum (ETH) in recent weeks. After observing a strong performance in the latter part of 2024, SOL has recently seen diminished growth compared to its competitors. Specifically, while Bitcoin has appreciated approximately 18% and Ethereum an impressive 28% over the past month, Solana has only managed a modest 3% increase, indicating a significant downturn from its previous market leadership.
This shift may be attributed to changing capital flows among these cryptocurrencies. Glassnode’s analysis utilizes the Realized Cap metric, which offers insight into the total value of a digital asset based on the prices at which tokens were last transacted. This model evaluates the cost basis of all circulating coins, effectively capturing the cumulative investment from all holders in the cryptocurrency. Movements in the Realized Cap can indicate whether capital is entering or exiting a particular asset.
During the period from September to early December, the Realized Cap for Solana was notably positive, signaling strong capital inflows. While Bitcoin and Ethereum also experienced growth during this time, it was Solana that exhibited the most significant gains. However, as market dynamics have shifted in recent weeks, both Bitcoin and Ethereum have surged ahead of Solana . This decline in SOL’s capital inflow appears to be the primary reason for its underperformance relative to its major contenders.
Currently, while Bitcoin and Ethereum continue to see price increases, Solana ’s price has remained relatively stable, hovering around $221. The contrasting movements highlight the evolving landscape of cryptocurrency investments and the impact of capital flow dynamics on market performance.
