In an unfolding saga of market dynamics, Solana’s (SOL) longstanding outperformance against Ethereum’s native token, Ether (ETH), is seemingly hitting a rough patch. As of today, May 29, 2025, the SOL/ETH pair has broken below a crucial rising wedge pattern, setting the stage for a potential 40% nosedive. This technical breakdown is sparking concerns among traders and analysts alike, as a confluence of factors weighs on Solana’s prospects.
SOL Faces Rising Wedge Breakdown
The SOL/ETH pair’s recent technical move has caught the attention of market watchers. Breaking below a rising wedge—a pattern often heralding significant declines—SOL is now eyeing a target of 0.038 ETH by July, a stark 40% drop from its current levels. The 50-week exponential moving average (EMA), hovering around 0.0628 ETH, is offering some interim support. However, a decisive weekly close below this threshold could spell further trouble, affirming the bearish outlook.
Yet, all hope isn’t lost. Should SOL manage to reclaim the wedge’s lower trendline as support, it might just delay the anticipated slide. A break above the upper trendline could invalidate the grim 40% crash scenario altogether. But with the current market sentiment, such a bullish reversal seems a tall order.
Memecoin Mania’s Waning Influence
The cooling memecoin craze on Solana is a narrative not to be overlooked. Pump.fun, the largest memecoin launch platform on the network, has seen its daily fee revenue plummet since early April. This decline is a red flag for Solana, which had leaned heavily on memecoin-driven activity to bolster its revenue.
Between December 2024 and March 2025, Solana was a hive of memecoin speculation, with total cumulative fees surpassing 3 million SOL. But as the frenzy fades, so too does a key component of Solana’s value proposition. A report from Standard Chartered on May 27 underscored this vulnerability, cautioning that Solana’s reliance on memecoins might lead to underperformance unless diversification is prioritized.
Ethereum, on the other hand, is making strides with its scalable layer-2 solutions—offering comparable transaction fees and more robust infrastructure for real-world applications. This adds another layer of pressure on Solana to innovate beyond its current offerings, as explored in our recent coverage of Ethereum bulls showing interest as traders’ confidence in ETH’s $1.8K level improves.
Ethereum’s Advantage
Chartist Alex Clay notes an emerging “Ethereum outperformance season,” citing confidence in the rising wedge breakdown on the SOL/ETH charts. Ethereum’s edge lies in its growing ecosystem, which is attracting both developers and users with its scalability and versatility.
The recent developments have raised questions about whether Solana can pivot and adapt in a rapidly evolving landscape. As Ethereum fortifies its position with layer-2 enhancements, Solana faces the challenge of reinventing itself—potentially beyond the memecoin narrative that once fueled its rise. This challenge is further compounded by the broader market dynamics, as discussed in our analysis of Bitcoin DeFi’s potential to surpass Ethereum and Solana with 300M users.
In this shifting market environment, the path forward for Solana remains uncertain. Will it succumb to the pressures of its own making, or will it find a new trajectory to maintain its relevance in the crypto cosmos? As the SOL/ETH pair wades through turbulent waters, the coming months could prove pivotal in determining Solana’s place in the blockchain hierarchy.
Source
This article is based on: Solana signals 40% crash vs. Ethereum amid cooling memecoin craze
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
