The Ethereum killer, Solana, seems to be losing against its rival over the 1-week chart. Solana was performing well when there were many meme coins launched on its network. However, with the number of memecoins launched on the Solana chain reducing drastically, the token seems to be losing value. Let’s take a look at the charts to get a better idea of what’s happening.
SOL/ETH 1-week chart (Source: tradingview)
The SOL/ETH pair was fluctuating inside a rising wedge since early 2024. However, the pair has broken out of the multi-month rising wedge. Instead of establishing a higher low to stay in shape with the pattern, the pair has crashed below the lower trendline.
When a breakout like this happens, one would expect the price of the SOL/ETH pair to drop by the maximum height of the wedge. If this is a conventional breakout, there is a high chance that the SOL/ETH pair could crash towards the 0.038 ETH level.
We looked at the indicators to hint at any sign of the price returning to the rising wedge pattern. However, neither the Bollinger band nor the RSI indicator shows an oversold market condition, which could help the prices appreciate through a market correction.
Analysts attribute Solana’s fall to the reduced number of memecoins being launched on the platform. Dune Analytics shows that the main memecoin launch platform Pump.fun showed a large drop in daily revenue fees since April. On January 24, 2025, Pump.fun achieved a record daily revenue of $15.5 million in fees. This daily revenue fee is usually a 1% fee on all trades that take place on the platform.
Following this spike, the curve seems to have flattened, indicating that reduction in memecoins activity on the platform, which aligns with what the analyst stated.
