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SOL Price Outperforms ETH as Solana On-Chain Activity Inches Closer to Ethereum

Last Updated May 15, 2024 10:41 AM
Valdrin Tahiri
Last Updated May 15, 2024 10:41 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways[/focus-text-wrap

  • The Solana to Ethereum chart reached an all-time high of 0.055 ETH in March.
  • Solana fees came close to Ethereum on May 12, while transaction greatly outpaced it.
  • SOL has outperformed ETH in the past two weeks but still trades below resistance.

The SOL price has been one of the best performing assets since the start of 2023. This is especially evident when comparing its price to that of Ethereum. The outperformance gave some credence to claims that Solana is an “Ethereum killer”.

After reaching a new all-time high price in March 2024, the SOL/ETH chart took a breather. But, its resurgence in the past two weeks leads to the possibility that the upward trend will continue.

Analyzing Solana’s Performance Relative to Ethereum

On May 12, Solana generated more transaction fees and Maximum Extractable Value (MEV)  than Ethereum. This is the first time it has happened. According to data from DeFiLlama, transaction fees alone were still higher for Ethereum, being $1.82 million to $1.19 million for Solana.

So, it is the MEV that makes the difference. The increase in MEV could be in large part to JTO, which uses a unique mechanism to reward validators for higher efficiency when determining the order of transaction execution.

Also, it is worth noting that on May 14, Ethereum had its lowest transaction fees in the past month.

Solana & Ethereum Stats
Solana/Ethereum Fees & Transactions | Credit: DeFiLlama

The exact opposite is the case for transactions , as evidenced by the 30 million transactions on Solana and only 1 million on Ethereum. Solana’s high transaction volume yet still lower fees highlights the stark contrast in transaction costs between Solana and Ethereum.

This has likely contributed to the difference in decentralized exchange volume. Solana beats Ethereum in daily volume ($1.31 billion to $1.29 billion) but has considerably lower fees at 0.5 million compared to Ethereum’s $177 million.

Solana Transaction Volume Price
Solana Transaction Volume & Price | Credit: Dune

Finally, there is a clear correlation between transaction volume and price. Transaction volume reached its all-time high in March, the same time the SOL price reached a new yearly high.

In other news, Robinhood announced  that Solana staking is available for EU customers.

SOL to ETH Ratio Approaches All-Time High

The SOL to ETH ratio increased rapidly after breaking out from a descending resistance trend line at the start of 2023. In March 2024, the SOL/ETH ratio reached a new all-time high of 0.059 SOL per ETH.

The SOL price has fallen since, confirming a deviation (red circle) above the long-term 0.054 ETH horizontal resistance area.

The decrease was preceded by a notable bearish divergence in the weekly RSI (green), a sign associated with tops. So, it is possible the five-wave upward movement (white) is complete.

SOL/ETH Price Ratio
SOL/ETH Weekly Chart | Credit: TradingView

In the past two weeks, SOL has considerably outperformed ETH, increasing by 20%. However, it still trades below the $0.054 horizontal area.

Therefore, it is possible the increase is part of wave B in an A-B-C (black) corrective structure. If the count is accurate, the SOL/ETH ratio will reach a local top near 0.054, complete wave B and then begin a downward movement toward the 0.382-0.5 Fibonacci retracement support area at 0.033-0.039, completing wave C.

SOL Outperforms in the Short-Term

The SOL price has outperformed ETH the past two weeks, and its fees are catching up to it for the first time in history. However, the wave count implies that an upward movement that started in 2023 has been completed, and the SOL price is completing wave B in a correction and will eventual fall again.

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