Since September 9th, Solana’s exchange supply decreased from 5.29% to 4.72%, indicating off-exchange accumulation. Approximately 9.06 million SOL have exited exchanges, contributing to SOL’s 16.19% weekly increase to $250. Ethereum experienced a movement of nearly 20,000 onto exchanges, which weakened its bullish hold. The SOL/ETH ratio surged by 8.66% at press time, representing its largest weekly increase since early April.
Clearly, FOMO is pursuing Solana this cycle. The situation is clear: Up until the middle of Q3, Ethereum was capturing the majority of altcoin investment with over 90% ROI, driving its dominance to a peak of 15% for the year. Currently, it has retraced by 8.3%, whereas SOL is achieving 8 times the monthly 7% gains of ETH. In summary, Solana is attracting investment away from Ethereum. On-chain divergence indicates that savvy investors are strategically adjusting their positions.
As per reports, this rotation may influence the dynamics of flows as we approach Q4. Transaction fees set Solana up for widespread acceptance. Solana adoption is making its way to Markets. Nonetheless, it’s not solely about speculative movements, as ETH continues to demonstrate over 80% ROI for Q3. What factors are influencing the influx into SOL? The narrative centers on cost efficiency. Solana is surpassing both Ethereum and Bitcoin in this context. In September, average transaction fees surged to below $3 for ETH and below $1 for BTC, while SOL’s fees remain consistent at $0.005, ensuring a smooth and efficient experience for users. In summary, Solana’s Layer 1 application is expanding significantly. The divergence is indeed leading to significant activity.
On-chain data indicates that SOL’s daily token volume has increased by 135% month-to-date, whereas ETH has only seen a rise of 20%. Solana is currently attracting nearly 10 times the daily flow compared to Ethereum, consistent with its 17% monthly increase. Considering the current rotation, extremely low fees, and increasing Layer 1 activity, Solana appears poised to continue surpassing Ethereum. Therefore, the fourth quarter has the potential to be SOL’s period of growth.