• In 2025, Solana has outperformed Ethereum for nearly half of the year, but its upward momentum appears to be waning.
• The declining volume on decentralized exchanges (DEX) and current market patterns indicate that Ethereum might be positioned for a resurgence.

Solana [SOL] kicked off 2025 with exceptional performance, surpassing Ethereum [ETH] for 47% of the year thus far, signaling a potential shift in investor sentiment.

Nevertheless, recent trends have sparked debates about Solana’s ability to maintain its lead.

Despite a strong start, Solana has seen a 24% drop in DEX trading volume this week, pointing to a possible inflection point.

As the ecosystem’s momentum appears to be facing a possible slowdown, one must ponder whether this is merely a temporary decline or the onset of a significant change in Solana’s competitive landscape.

Is Solana Experiencing a Shift in Momentum?

Recent analysis revealed that Solana significantly outperformed Ethereum throughout a large portion of 2024, notably excelling in the fourth quarter. However, signs of weakening have emerged.

While Bitcoin [BTC] continues on a strong upward path, Solana has been displaying increased price volatility, closely mirroring Ethereum’s price changes.

Source: X

Importantly, the frequency of Solana outperforming Ethereum has stabilized, indicating a possible reduction in its competitive edge.

The correlation between SOL and ETH prices is tightening, further diminishing Solana’s previous advantages.

With the current decline in DEX transaction volumes, this increase in correlation raises questions about whether Solana’s earlier successes were momentary or if its fundamentals still support a dominant market position.

Recent Decline in Solana’s DEX Volume

Solana’s DEX trading volume has seen a notable reduction, with a staggering 38% drop over the past week.

This decline marks the fifth consecutive week of diminishing volumes, with prominent DEXs such as Raydium [RAY] and Orca [ORCA] experiencing reductions of 54.34% and 20-30%, respectively.

Source: DeFiLlama

Multiple factors may be contributing to the recent drop in Solana’s DEX volume.

One key factor is the emergence of memecoins, especially the controversial LIBRA token endorsed by Argentine President Javier Milei, resulting in substantial investor losses and damaging Solana’s credibility.

As a result, there has been a decline in user participation and trading activities on Solana-based DEXs, with traders adopting a more cautious approach.

Moreover, the broader decline across the market is influencing these trends. The fall in Solana’s on-chain volumes aligns with similar decreases observed in other blockchain networks like BNB Chain, Ethereum, Sui [SUI], and Polygon [POL].

These patterns indicate a widespread cooling in DeFi activity, suggesting that the issues Solana is facing may reflect a larger market slowdown.

Is Ethereum’s Momentum Sustainable?

Currently, Ethereum is trading at $2,801.32, reflecting a 1.37% increase on the day as it attempts to rebound from recent lows.

Technical analysis reveals mixed signs; the RSI remains below the neutral 50 threshold, indicating neither significant buying nor selling pressure.

On the other hand, the MACD histogram has turned positive, indicating the potential for bullish momentum.

Source: TradingView

In January 2025, Vitalik Buterin revealed significant leadership changes in the Ethereum Foundation aimed at enhancing Layer 2 scalability and interoperability.

A recent infusion of $120 million worth of Ether into DeFi projects is projected to help maintain the Ethereum ecosystem’s resilience.

Nonetheless, Ethereum must navigate challenges such as network congestion and increasing competition from Solana.

While Buterin’s reforms could bolster Ethereum in the long run, overcoming its established obstacles will be crucial for it to stay ahead of Solana.