BTC falls, ETH falls, why do funds flow to SOL?

When BTC and ETH continue to be under pressure, SOL has become the strongest mainstream asset in recent times, which is also the biggest differentiation signal in the current market. The market sentiment is still in the extreme panic zone, with the Panic Greed Index at 15, and risk appetite has not yet significantly recovered. At the same time, BTC spot ETFs have recently recorded significant net outflows of funds, while ETH spot ETFs have also experienced outflows for several consecutive weeks. Institutional funds remain cautious, and the return of incremental funds still needs to wait. However, from the perspective of the market, the flow of funds has begun to change. In the past 7 days, BTC has fallen by 6.93%, ETH has fallen by 8.15%, and SOL has risen by 3.10% during the same period, becoming one of the few mainstream currencies that maintains positive weekly returns; In the past 24 hours, SOL has continued to rise by 3.88%, clearly outperforming BTC and ETH. The relative strength of SOL is not accidental, but is driven by a combination of three factors. Firstly, against the backdrop of continuous outflow pressure on BTC and ETH, some risk funds have begun to rotate towards mainstream assets with higher elasticity, and SOL has become an important direction for fund absorption. Secondly, the funding rate of SOL perpetual contracts is still close to zero, indicating that this round of increase is not driven by high leverage funds, but by the gradual layout of spot funds and low leverage funds, and the market sentiment is relatively rational. In addition, the derivatives market has completed a round of risk release. The 24-hour liquidation amount in the entire market remained high, and long positions experienced concentrated liquidation in the short term. If the subsequent selling pressure further eases, it cannot be ruled out that funds will continue to flow towards relatively strong varieties, further strengthening the independent trend of SOL. Focus on three key positions BTC：58, 000-60000 USD After the integer level of $60000 fell, $58000 became an important short-term support area. If we stand back above $60000, we may further test the pressure zone of $61500-62500; If it falls below $58000, we need to be vigilant about further expansion of the adjustment. SOL: 70-74 USD $70 remains an important short-term support area, and the current long short watershed is around $74. If it continues to stand firm and breaks through $80, the independent market is expected to continue further; If it falls below $70, it is necessary to reassess whether the fund rotation has ended. ETH：1, 500-1600 US dollars $1600 remains an important short-term pressure area. If it regains its footing, it will help repair mainstream coin sentiment; If it falls below $1500, we need to be wary of another market linkage adjustment. Trader observation The biggest change in the current market is not how much BTC has fallen, but rather the clear differentiation of funds. The continuous outflow of ETF funds is suppressing the performance of BTC and ETH, while SOL is favored by some funds due to its relative return advantage. Next, if the outflow of ETF funds slows down, BTC stabilizes at $60000, and SOL continues to perform stronger than the market, the logic of fund rotation is expected to be further strengthened; On the contrary, if SOL falls below $70, it is necessary to be wary of the short-term strong structure being broken. Risk Warning: The above content is only for market information sharing and data analysis, and does not constitute any investment advice.