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Solana and Ethereum vied for dominance throughout Q4 2024. Ethereum received more than $850 million in institutional capital flows into ETFs, while Solana attracted more than $300 million in cross-chain flows over the past week.
Market experts indicate and reports Solana About to win Ethereum And replacing ETH as the largest altcoin in the cryptocurrency space. 2025 is therefore a pivotal year for Ethereum and Solana, and the latter’s competitive advantage lies in its DEX metrics and growth potential combined with rising capital inflows.
A Solana win could trigger changes in wallets and Ethereum beta runs could experience a correction if SOL displaces ETH. This can go deeper to effectively prepare traders for the changing dynamics in cryptocurrencies.
Solana vs Ethereum
Solana overtook rival Ether in several key areas in 2024. After outperforming Ethereum in October and November 2024, Solana competed with Ether in December. Data from TheBlock shows that SOL and ETH compete in app revenue, app fees, and decentralized exchange volume.
Regarding application fees, Ethereum earned $311.1 million this month, compared to Solana’s $322.8 million.
Solana overtook Ethereum in application revenue in October and November 2024, and in December Ethereum posted $93.56 million and Solana dominated at $140.95 million.
In terms of DEX volume, Solana leads at $67.43 billion, and Ethereum lags behind at $52.37 billion, according to TheBlock data. Solana-based DEXes observed a significant volume of token launches and trading in Q4 2024, and this will likely be the catalyst driving DEX volume on the SOL chain.
Solana’s growing dominance in DeFi is evident by comparing the two chains. SOL looks set to outperform Ethereum on DEX metrics in December as well, extending its streak from the past two months.
These incentives could enhance Solana’s adoption
The SEC’s approval of the Solana ETF could legitimize SOL and boost altcoin adoption among crypto market participants. Ethereum ETF adoption has supported capital inflows into the altcoin and in the past week alone, ETH has raised over $850 million from institutional investors.
Solana has raised over $300 million from various blockchains, including $200 million transferred from Ethereum, in just the past week. Solana-based DEXes bridge the gap with centralized exchanges in the cryptocurrency ecosystem. Progress and scalability are slowly enhancing the usefulness of DEXes and increasing the number of active users every week.
Anmol Singh, co-founder of Zeta Markets, told crypto.news in an exclusive interview:
“Solana is on track to establish itself as a dominant player in DeFi and on-chain applications by 2025. With its low fees, high speed, and growing ecosystem, it is ideally positioned to absorb capital flowing into DeFi. Breakthroughs in DEX performance and scalability will continue Move centralized exchanges out of the way, and shift the focus to decentralized platforms that are faster, fairer and more transparent.”
Cryptocurrency market participants are looking forward to the Petra upgrade which is expected to significantly improve Ethereum’s speed and performance. Meanwhile, Solana’s Frankendancer and Firedancer upgrades promise to transform the SOL network, enhancing reachability, uptime, and overall performance.
Technical analysis objectives for Solana and Ethereum
Ethereum is trading near its 2024 peak of $4,107. The altcoin hovered around the psychologically important $4,000 level on Tuesday. Ethereum’s previous high is $4,878 and the session target is $5,185, which is the 161.80% Fibonacci retracement level of the rise from the November 4 low of $2,361 to the 2024 high of $4,107.
The RSI reads 61, below the 70 level, and this usually generates a sell signal. The Moving Average Convergence Divergence indicates an underlying downward momentum in the Ethereum price direction.
Ethereum could find support in the area between $3,252 and $3,680, as shown in the daily price chart, in case of a correction.
Solana’s daily chart shows the potential for gains in SOL. Solana is trading at $219 on Tuesday. Rival Ethereum is currently consolidating, but a close of the daily candlestick above $231.62 could mark the end of the sideways trend.
Solana may face resistance at the top of $264.59 and the session target is $359.81, which is the 161.80% Fibonacci retracement level of Solana’s price rise.
If Solana faces a correction, traders can identify $221.06 to $233.22 as the support area for the altcoin.
Solana cools down after Pump.fun stops live streaming
While the growing popularity of DEX and high DeFi token activity has positioned Solana as a major competitor to Ethereum, Launchpad Pump.fun’s decision to end its live stream may have slowed SOL’s progress.
The slowdown in terms of on-chain activity and network revenues that SOL has experienced is likely a result of Pump.fun’s recent steps. The SOL Network generated an average of $5 million in fees per day, nearly 50% less than the average daily fees the network generated during the third week of November, when it recorded its highest ever single-day revenue of $13.3 million .
It remains to be seen whether Solana will recover from the slowdown, or whether ETF approval or increased DEX adoption could emerge as drivers of SOL adoption this cycle.
Disclosure: This article does not constitute investment advice. The content and materials contained on this page are for educational purposes only.
