Solana (SOL) has been rapidly gaining ground on Ethereum (ETH) in recent weeks, with key metrics showing increased adoption, stronger liquidity, and growing investor interest. While Ethereum still holds a much larger market capitalization at $190.41 billion compared to Solana’s $71.93 billion, recent trends suggest that Solana is starting to carve out a larger share of the crypto market.

Whale Activity Favors Solana

One of the biggest drivers of this shift comes from major market participants. Galaxy Digital, a well-known crypto whale, recently sold 65,600 ETH (worth $105.48 million) and purchased 752,240 SOL (valued at $98.32 million) via Binance. This substantial move away from Ethereum and into Solana signals growing confidence in SOL’s long-term potential.

This trend isn’t isolated. A number of other whales have reportedly reduced their ETH exposure as Ethereum’s price struggled, while Solana has shown comparatively better performance. These large-scale transactions hint at a broader market sentiment leaning towards Solana, driven by its increasing efficiency, lower transaction costs, and robust ecosystem growth.

Solana vs Ethereum: Liquidity and Market Strength

A recent analysis of the SOL/ETH trading pair reveals that Solana is inching closer to breaking its all-time high in comparison to Ethereum. A rising SOL/ETH ratio typically indicates that more liquidity is flowing into Solana than Ethereum, signaling stronger investor confidence in SOL.

Beyond this, Solana’s ecosystem continues to strengthen. According to DeFiLlama, Solana’s Total Value Locked (TVL) has grown steadily, currently sitting at $7.36 billion. Over the past month, most Solana-based protocols experienced an average liquidity growth of 9.34%, showing widespread user and developer engagement across the network.

In parallel, the amount of stablecoins held on Solana has surged to $12.98 billion. Stablecoin growth is often seen as a sign of increasing on-chain activity, as traders and investors use these assets to interact with decentralized applications. Together, these metrics point to a vibrant and expanding ecosystem that is drawing in more users and capital.

DEX Volume Surpasses Ethereum

In a notable milestone, Solana’s decentralized exchange (DEX) trading volume recently surpassed that of Ethereum, Binance Smart Chain (BSC), Base, and Arbitrum. With $5.46 billion in trading volume over the past week, Solana now leads in on-chain trading activity. This surge in volume not only reinforces Solana’s position as a strong competitor to Ethereum but also reflects shifting trader preferences in the DeFi space.

The reasons behind this growth are tied to Solana’s speed and low transaction fees, which have made it an attractive alternative to Ethereum’s more congested and expensive network.

Storm Clouds Ahead: Sell-Offs Begin

Despite all the bullish momentum, not everything is smooth sailing for Solana. Recent data shows that the number of wallets holding SOL has declined—from 11.11 million to 10.83 million. This drop suggests that some investors are beginning to sell their holdings, possibly to take profits after the recent rally.

This kind of sell-off can place downward pressure on SOL’s price, especially if more holders follow suit. Even though institutional interest appears strong, continued outflows from retail investors could limit the token’s upside potential in the near term.

Outlook: Can Solana Maintain Its Momentum?

Solana’s recent outperformance of Ethereum across several key metrics—whale accumulation, liquidity growth, trading volume, and DeFi participation—shows that it’s no longer just a promising alternative but a serious contender in the blockchain race.

However, rising sell pressure and the unpredictability of market sentiment mean the path forward isn’t guaranteed. To maintain momentum, Solana must continue attracting both users and developers while avoiding major network setbacks or regulatory headwinds.

For now, Solana stands as a shining example of how innovation and network efficiency can challenge even the largest players in the crypto space. But as always in crypto, momentum can shift quickly—and investors would do well to keep a close eye on the evolving dynamics.