Recently, the Solana network has outpaced the Ethereum network in web3 activities, driven by the growth of its meme coin space.
The Solana price established the ongoing bullish breakout, which has maintained a strong support level above $128 for the past seven months. The large-cap altcoin, which has a daily average traded volume of approximately $4.7 billion and a fully diluted valuation of roughly $98 billion, has experienced a more than 8% increase in the past two weeks, surpassing a critical resistance level of approximately $160 for the first time since late July.
The probability of a bullish breakout toward the all-time high has significantly increased, even though Solana’s price is not entirely out of the woods. To guarantee a rally toward $250 in the coming weeks, the Solana price must consistently close above the $190 peak reached in July 2024, per technical analysis.
However, the final call for Solana’s bullish breakout will be significantly influenced by the price action of Bitcoin and Ethereum in the near term. All will probably occur in the near future, as the altcoin market exhibits a positive correlation with Bitcoin, which has, in turn, exhibited a positive correlation with Gold.
Fundamentally, the cryptocurrency market is anticipating an additional Federal Reserve rate reduction in anticipation of the forthcoming 2024 general election in the United States.
Solana jeopardizes the dominance of Ethereum Web3
In the past year, the Solana Network has evolved into a dynamic Web3 ecosystem despite the implosion of Alameda Research and FTX. According to the most recent market data, the Solana network has a total value of approximately $6.41 billion, which is the highest it has been since January 2022.
In the past year, the Solana ecosystem has experienced a substantial increase in confidence, as evidenced by its stablecoin market cap has surpassed $3.5 billion. Notably, the Solana network had approximately 7.62 million active addresses in the past 24 hours, whereas the Ethereum network had a total of 397k daily active addresses.
The meme coin ecosystem, which has grown to a market capitalization of over $11 billion and a daily average traded volume of approximately $2.5 billion, is the primary reason for the significant increase in Solana’s on-chain activity.
As a result, Solana’s DEX volume surpassed $2B in daily volume for the third consecutive day, surpassing Ethereum and all other top-rated chains. In the interim, Pump.fun, the token issuer for Solana, is on the brink of collecting 1 million SOL in lifetime fees, having facilitated the launch of more than 2.5 million meme coins.
Conversely, the Ethereum network continues to battle inadequate demand from institutional investors, as evidenced by the substantial cash outflows from the US spot Ether ETFs.
Even though it has over a dozen scaling solutions, Ethereum’s dominance in the Web3 space is significantly threatened by Solana and other emerging chains, including Toncoin.