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Ark Invest's Chris Burniske Says Solana (SOL) and Ethereum (ETH) Are Key Indicators: Details

Tue, 01/24/2023 - 12:16
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Arman Shirinyan
Analyst believes appetite for risk on market is going to rise
Ark Invest's Chris Burniske Says Solana (SOL) and Ethereum (ETH) Are Key Indicators: Details
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The former lead of Ark Invest's crypto department, Chris Burniske, believes Solana and Ethereum can be used as more than trading and investment instruments but also as risk indicators. Here's how.

Crypto risk spectrum

According to the analyst, the SOL/ETH trading pair can be used as a key indicator of the crypto risk spectrum or, simply put, a tool to evaluate the risk tolerance of cryptocurrency investors on the market. Considering that both Solana and Ethereum are historically far more volatile than Bitcoin, using them to determine if the current risk level on the market is beneficial.

However, Solana and Ethereum are not only assets that can be used as risk indicators. The cryptocurrency market as a whole is a reflection of risk tolerance among investors. Digital assets are extremely volatile and sometimes illiquid, which makes crypto investors extremely vulnerable to double-digit swings, especially if margin trading is in effect. Those who expose themselves to such instruments are considered risk tolerant from the standpoint of a traditional investor.

"Doesn't look like it wants to stop"

According to Burniske, it seems like ETH to SOL does not look like it will be retracing any time soon, suggesting that appetite for risk is going to move upward only, instead of going down. However, considering cryptocurrency' s market dependency from stocks and traditional markets in general, Solana or Ethereum should not be considered as market-moving assets or indicators.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.