Could Solana Dethrone Ethereum? SOL Targets $350 by 2025 Amid Growing Competition

Solana (SOL) and Ethereum (ETH) have been in a fierce battle for dominance in the cryptocurrency market throughout the latter part of 2024. While Ethereum has attracted significant institutional capital, with over $850 million flowing into Ethereum-based ETFs, Solana has made impressive strides by securing over $300 million in cross-chain inflows in just the past week. These developments have led many industry experts to believe that Solana is poised to challenge Ethereum's supremacy, potentially replacing ETH as the largest altcoin in crypto. With 2025 fast approaching, the stakes are higher than ever for both Ethereum and Solana.

Solana’s competitive edge lies in its growing dominance within the decentralized exchange (DEX) market and its rising capital inflows, which have positioned the altcoin as a formidable contender. If Solana continues on this trajectory, it could disrupt Ethereum's dominance, potentially leading to a correction in Ethereum's market position as Solana takes the lead.

Solana vs. Ethereum: Key Metrics Show a Tight Race

In several key areas, Solana has outperformed Ethereum in 2024. After surpassing Ethereum in performance metrics during October and November, Solana remains closely behind Ethereum in December. According to data from TheBlock, both Solana and Ethereum are competing head-to-head in areas like app revenue, app fees, and DEX volume.

When it comes to app fees, Solana has recently pulled ahead, with the network generating $322.8 million in December, surpassing Ethereum’s $311.1 million. Similarly, in terms of app revenue, Solana took the lead in October and November, and in December, Ethereum recorded $93.56 million in app revenue, while Solana dominated with $140.95 million.

Solana is also leading in DEX volume, reporting $67.43 billion in transactions, compared to Ethereum’s $52.37 billion. This dominance in decentralized finance (DeFi) metrics reflects Solana’s growing popularity in decentralized applications (dApps), token launches, and trading volume. The Solana network’s performance has been driven by a surge in token activity and new projects being launched on the platform, marking a significant catalyst for DEX volume in the final quarter of 2024.

Factors Driving Solana’s Growth

Several key factors are contributing to Solana’s rapid growth and could propel the altcoin further in the coming months. A potential Solana ETF approval by the U.S. Securities and Exchange Commission (SEC) could legitimize the token and significantly increase its adoption among institutional investors. Ethereum's success in securing ETF adoption has already led to substantial capital inflows, with over $850 million being funneled into Ethereum-based products in the past week alone.

Meanwhile, Solana has been receiving growing support from other blockchains, with $200 million of its $300 million in recent inflows coming directly from Ethereum. This highlights the increasing shift of capital from Ethereum to Solana as investors look for new opportunities in the market. Additionally, Solana-based DEXs are rapidly closing the gap with centralized exchanges, with rising scalability and user activity driving higher transaction volumes and an expanding user base.

The upcoming upgrades to both Ethereum and Solana also play a crucial role in their respective trajectories. Ethereum’s Petra upgrade, aimed at enhancing the network’s speed and performance, has been highly anticipated. Solana, however, is also making strides with its Frankendancer and Firedancer upgrades, which promise to significantly improve the network’s accessibility, uptime, and overall performance, further positioning Solana as a potential leader in the space.

Technical Analysis: Price Targets for Solana and Ethereum

From a technical perspective, Ethereum is currently trading near its 2024 peak of $4,107, hovering around the critical $4,000 mark. Ethereum’s previous all-time high of $4,878 remains within reach, with the cycle target for Ethereum set at $5,185—corresponding to the 161.80% Fibonacci retracement level of its recent rally. Despite these bullish targets, Ethereum’s Relative Strength Index (RSI) stands at 61, indicating that the market is nearing overbought conditions. The Moving Average Convergence Divergence (MACD) also suggests a potential bearish trend, hinting at a possible correction in the near future.

Solana, on the other hand, is trading at $219, showing strong consolidation. A close above $231.62 could mark the end of this consolidation phase, signaling a potential breakout. Solana’s cycle target is set at $359.81, corresponding to the 161.80% Fibonacci retracement level, suggesting significant upside potential if the altcoin continues its upward momentum. In the event of a correction, key support levels for Solana are found between $221.06 and $233.22.

Solana Faces Challenges But Remains a Strong Contender

While Solana has made impressive gains, the network recently experienced a cooldown following the decision by the launchpad Pump.fun to cease livestreams. This slowdown in on-chain activity has resulted in a drop in network revenue, with Solana's daily fees now averaging nearly $5 million—down from the record-high $13.3 million generated in November. This decrease in network revenue may slightly delay Solana’s progress, but the altcoin remains well-positioned to bounce back, especially if its ETF approval or further DEX adoption drives additional growth.

Conclusion: The Road Ahead for Solana and Ethereum

As the competition between Solana and Ethereum heats up, 2025 promises to be a pivotal year for both networks. If Solana continues to outpace Ethereum in key metrics such as DEX volume, app fees, and app revenue, it could dethrone Ethereum as the leading altcoin. However, Ethereum’s upcoming upgrades and strong institutional support suggest that the battle for dominance is far from over. Traders and investors alike should closely monitor these developments, as the outcome of this rivalry could have significant implications for portfolios and the broader crypto market.

With Solana's growing influence in DeFi, its increasing cross-chain capital inflows, and the promise of transformative upgrades, SOL is rapidly emerging as a formidable challenger to Ethereum's long-held position at the top of the altcoin rankings. Whether Solana can maintain its momentum and rise to new heights in 2025 remains to be seen, but it is clear that the rivalry between these two blockchain giants will shape the future of the crypto space.