Solana Gains 6.39% as Ethereum Drops 30.13% Since June

TLDR

• Solana price has increased 6.39% since June 20, while Ethereum dropped 30.13%
• SOL may gain an additional 18% against ETH in coming weeks
• Negative net flows on Ethereum’s U.S. spot ETF have hurt its performance
• Solana’s share of total DeFi TVL has grown from 4.14% to 6.56% since July 2024
• SOL price shows bullish inverse head-and-shoulders pattern with $160 neckline

The cryptocurrency market has witnessed a notable shift in recent months, with Solana (SOL) emerging as a strong performer against its rival Ethereum (ETH).

As of October 7, 2024, Solana’s price has shown remarkable resilience, increasing by 6.39% since June 20, while Ethereum has experienced a significant drop of 30.13% during the same period.

This divergence in performance can be attributed to several factors. Solana has gained traction due to its consistently low transaction fees and high network speeds, even during periods of intense activity.

The blockchain has also seen an explosion of meme coins, particularly through platforms like Pump.fun, which has drawn increased attention and trading volume to the network.

In contrast, Ethereum has faced challenges that have impacted investor confidence. The introduction of Ethereum’s U.S. spot ETF in July 2024 has been accompanied by persistent negative net flows, indicating a lack of sustained investor interest.

Additionally, ongoing concerns about high fees and slower transaction speeds on the Ethereum network have led some users to explore alternative platforms.

Solana Price on CoinGecko

The shifting landscape is reflected in the total value locked (TVL) across decentralized finance (DeFi) protocols. Data from DeFiLlama reveals that Ethereum’s share of the total TVL has decreased from 62.38% to 54.94% since the week of July 23, 2024, when its spot ETF began trading.

During the same period, Solana’s share has grown from 4.14% to 6.56%, suggesting a migration of capital and user activity towards the Solana ecosystem.

Solana’s price action has caught the attention of technical analysts. The SOL price chart currently displays an inverse head-and-shoulders pattern, which is often interpreted as a bullish reversal signal.

The neckline of this pattern is situated around the $160 mark, and a breakout above this level could confirm the reversal and potentially lead to further price appreciation.

If the bullish momentum continues, Solana may encounter resistance at $180, with a longer-term target around $200 based on projections from the inverse head-and-shoulders pattern.

However, it’s important to note that if SOL fails to break above the neckline, it could indicate market weakness and potentially lead to a decline towards support levels at $148 or even $140.

The relative strength of Solana against Ethereum is particularly noteworthy. Technical analysis suggests that SOL may gain an additional 18% against ETH in the coming weeks.

This potential outperformance could further incentivize investors to shift their focus from Ethereum to Solana, potentially driving up Solana’s TVL and price.