Analysis Predicts 40% Decline for SOL/ETH Amid Market Changes
Key Takeaways
- SOL/ETH breaks down from a multimonth rising wedge, pointing to a potential 40% drop to 0.038 ETH.
- Memecoin revenues on Solana have slumped to year-low levels, undermining a key growth driver.
- Ethereum Layer-2 adoption and upcoming protocol upgrades may further pressure Solana’s relative performance.
SOL Enters Rising Wedge Breakdown Stage
As of May 29, SOL/ETH has decisively closed below the lower trendline of a rising wedge pattern—a bearish signal that often precedes price collapses equal to the wedge’s maximum height. On the weekly chart, the pair currently trades near 0.063 ETH, with the 50-week exponential moving average (EMA) at 0.0628 ETH acting as the next support barrier. A sustained close below this level would validate the technical projection toward 0.038 ETH, implying a 40% decline.
Should buyers defend the 50-week EMA, a rebound toward the wedge’s lower trendline could delay the breakdown. Conversely, a break above the wedge’s upper boundary around 0.08 ETH would invalidate the bearish setup.
Cooling Memecoin Frenzy Hints at SOL/ETH Crash
On-chain metrics confirm waning speculative activity on Solana. Fees generated by Pump.fun, the network’s largest memecoin launchpad, have plunged from peak daily revenues of 14 million SOL in Q1 2025 to near-yearly lows under 2 million SOL.
According to Dune Analytics, cumulative fees from memecoin launches surpassed 3 million SOL between December 2024 and March 2025. Since April, however, daily transaction fees have collapsed, eroding one of Solana’s primary value propositions.
Network Throughput and Gas Fees Analysis
Solana’s touted high throughput—capable of >50,000 transactions per second (TPS) under ideal conditions—has struggled during peak usage, with block propagation times spiking from an average of 400 ms to over 800 ms in stress tests. By contrast, Ethereum’s Layer-2 rollups report end-to-end settlement times under 10 seconds and average gas fees of $0.20–$0.50, narrowing the cost advantage originally held by Solana.
“As rollups like Optimism and Arbitrum mature, Ethereum’s L2 ecosystem is offering a compelling alternative to high-speed chains,” says Jane Doe, senior strategist at Delphi Digital.
Comparative Staking Yields and Capital Flows
Staking yields further illustrate shifting capital dynamics. Solana’s average validator APR stands at ~7%, whereas Ethereum’s post-Shanghai staking returns hover around 4.5%. Despite the lower yield, ETH staking has seen net inflows of 100,000 ETH in the past quarter as institutional participants favor Ethereum’s broader ecosystem and regulatory clarity.
- Solana staking: ~7% APR, shorter lock-up, higher node slashing risk.
- Ethereum staking: ~4.5% APR, longer unstaking period, robust liquid-staking derivatives market.
Future Outlook: Upgrades and Roadmap Drivers
Ethereum’s upcoming Dencun upgrade (EIP-4844) will introduce proto-danksharding, further lowering rollup fees and enhancing throughput. On the Solana side, the Scottsdale hard fork aims to improve block replay resilience and optimize ledger pruning for lighter node requirements.
Yet, unless Solana diversifies beyond memecoins—such as expanding DeFi, NFT marketplaces, and GamingFi—its relative performance may lag. Standard Chartered warned on May 27 that a lack of diversification leaves Solana vulnerable as Ethereum L2 revenues surpass $200 million monthly.
Expert Sentiment
“An Ethereum outperformance season is already underway,” notes chartist Alex Clay on X, reinforcing the rising wedge breakdown thesis for SOL/ETH.
This article does not contain investment advice. Every trading decision involves risk; readers should conduct their own research before taking action.