Key Summary:
SOL/ETH has broken below the ascending wedge pattern, suggesting a potential 40% decline.
The meme coin revenue of Solana has significantly collapsed since April, weakening its core value proposition.
Standard Chartered Bank warns that as the competitiveness of the Ethereum L2 ecosystem increases, Solana may underperform.
The long-standing advantage of SOL relative to ETH is losing momentum, with the technical breakdown and weakened on-chain activity indicating that the SOL/ETH currency pair may soon experience a significant drop.
As of May 29, the SOL/ETH currency pair has confirmed a breakdown from its months-long ascending wedge pattern, which is typically a bearish structure that signals a major decline.
From a technical analysis perspective, a breakdown from an ascending wedge usually leads to a decline equivalent to the maximum height of that pattern.
For SOL/ETH, this suggests a downward target of around 0.038 ETH in July, representing a 40% drop from current levels.
The 50-week exponential moving average (50-week EMA; red dashed line) is providing temporary support near 0.0628 ETH. If the weekly close decisively breaks below this level, it is likely to confirm a bearish continuation towards the 0.038 ETH target.
On the other hand, if a rebound occurs, SOL may regain the descending trendline of the wedge as support, which could delay the breakdown scenario. A breakout above the ascending trendline of the wedge could completely invalidate the 40% crash pattern.
The breakdown of SOL/ETH coincides with a noticeable decline in meme coin-driven activity on the Solana network.
Key indicator Pump.fun (the largest meme coin issuance platform on the Solana network) shows a significant drop in daily fee revenue since early April.
According to Dune Analytics, daily fees peaked in Q1 2025 but have since fallen to near yearly lows, indicating a marked decrease in on-chain speculative activity.
This platform was a major contributor to Solana's revenue growth, particularly between December 2024 and March 2025.
During this period, as retail investors flocked to the network to issue and trade meme tokens, total cumulative fees surpassed 3 million SOL. These metrics have since plummeted, undermining Solana's primary value drivers.
Standard Chartered Bank's research report on May 27 further reinforces this bearish sentiment. The bank warns that if Solana fails to diversify its business beyond meme coins, its performance may fall short of expectations, as meme coins currently dominate its trading activity.
Standard Chartered points out that Ethereum is gaining a competitive edge through scalable layer two solutions that offer comparable fees and a deeper practical application infrastructure.
Chart analyst Alex Clay asserts that the "Ethereum advantage performance season" has arrived, reaffirming the view on the SOL/ETH chart's ascending wedge breakdown.
Related: OpenSea expands beyond the NFT space, launching OS2 public version
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “As the Memecoin Craze Cools, Solana (SOL) May Face a 40% Crash Compared to Ethereum (ETH)”
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