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Solana (SOL) has risen over 600% against Ethereum (ETH) since 2023, driven by the recent memecoin frenzy and increased network activity. The SOL/ETH ratio recently hit a record high above 0.066 as excitement builds around Solana’s potential to rival Ethereum.
This 3.5% surge in the ratio follows a significant increase in Solana network activity, especially with DEX trading volumes topping $2 billion daily, surpassing Ethereum’s stagnant volumes of $1-2 billion. Solana’s total value locked (TVL) also climbed to $6.4 billion, marking its highest level since early 2022, while Ethereum’s TVL remains flat at around $48 billion.
Known for its faster, lower-cost transactions, Solana has become popular for meme coin trading and shows strong potential to gain further traction in DeFi and GameFi.
Let’s dive in to know why Solana is riding high!
What’s Driving the Solana Hype?
In Crypto Banter’s recent video analysis, the YouTuber dives into the incredible growth potential of Solana, spotlighting the network’s current momentum and breaking down why he believes it could experience a substantial price surge. He initially sensed Solana’s strong growth trajectory and flagged the potential for a 400% surge, a prediction he based on rising engagement and transaction metrics across the network.
Solana’s DEX activity has also surged, rivaling Ethereum’s volumes. This rise began in mid-2023 and has accelerated through 2024, drawing in traders with its lower fees and faster transactions. Much of this growth is driven by memecoin trading, especially with popular Solana tokens like Radium and Drift. Analyst believes this trend could challenge Ethereum’s dominance, suggesting that Solana may be capturing a significant share of Ethereum’s user base.
Could Solana Reach $500?
The analyst notes a clear trend of users shifting from Ethereum to Solana, fueled by Solana’s rapid growth in active addresses and DEX trading volumes. With Solana’s “supercycle” in motion, he believes it could replicate Ethereum’s last bull run, potentially reaching $500 long-term. To capitalize on this, he suggests first investing in Solana as a core blockchain, then moving to larger tokens with strong network traction, and finally, exploring smaller, high-potential tokens. He encourages high-risk-tolerant investors to use this strategy to tap into what he sees as Solana’s explosive future.
Can Solana Truly “Flip” Ethereum?
While SOL would need to grow 3.5 times its market cap to surpass Ethereum, analysts from VanEck believe it could reach 50% of ETH’s valuation if its user base continues expanding. The upcoming Firedancer upgrade in 2025, which could allow Solana to handle up to 1 million transactions per second, may also boost its appeal to institutional investors.
Despite the momentum, technical indicators suggest SOL may be overvalued. Analysts predict a possible 40-50% drop by early 2025, with the SOL/ETH ratio potentially falling to the 0.0357-0.0436 ETH range if a correction occurs.
Solana is winning in speed, adoption, and users a possible threat to the second largest cryptocurrency ETH, will SOL maintain this momentum? We will see!