Memecoins Lose Steam: End of Momentum for Solana?
Speculative activity tied to memecoins has significantly deteriorated, negatively impacting Solana, which appears to have lost ground against Ethereum. This is according to a Cointelegraph headline from May 29, 2025, which reported a ‘40% drop in the SOL/ETH pair.
Read here: What are memecoins?
What’s Happening with Memecoins on Solana?
Revenue generated by memecoins within the Solana ecosystem has been declining since April 2025, according to reports from Cointelegraph. This trend has impacted what was considered a core value proposition for the network.
The Pump.fun platform, identified as the largest memecoin launcher on the Solana network, has experienced a substantial drop in revenue since early April. This reduction in Pump.fun’s activity, a significant contributor to the Solana network, is directly associated with a decrease in speculation and the volume of new token launches.
In this regard, Dune Analytics charts show that Pump.fun’s daily fees peaked in the first quarter of 2025.
“The platform had been a significant contributor to Solana’s revenue growth, especially between December 2024 and March 2025. During this period, total accumulated fees exceeded 3 million SOL as retail traders flooded the network to launch and trade meme tokens. These metrics have since plummeted, weakening one of Solana’s main value drivers,” Cointelegraph stated.
Various on-chain indicators show a decrease in volume and participation: less enthusiasm for memecoins, which translates into reduced memecoin-driven activity on Solana. The drop in Pump.fun’s fee revenue is an indicator of decreasing trading volume. Furthermore, according to a Standard Chartered report from May 27, 2025, shared with Cointelegraph, memecoin trading volume has decreased.
Why Was the Memecoin Frenzy So Important for Solana?
Memecoins quickly became attractive due to their very low unit prices. This garnered the attention of a large number of investors and speculators looking for high returns with small investments. This dynamic led to a massive creation and trading of memecoins, which multiplied transactions on the Solana network. It presented itself as the ideal platform for processing these multiple purchases and quick sales, leading to increased network usage and strengthening the chain’s economy. The result was the generation of more revenue and fees for its validators.
According to an article published in January 2025 by Cointelegraph, Solana’s trading volume was heavily influenced by the memecoin euphoria, which directed a lot of liquidity towards Solana-based decentralized exchanges (DEXs) like Raydium and Jupiter Exchange. Furthermore, being essentially viral, memecoins required a lot of “hype” and media exposure, and Bonk and Dogwifhat tokens on Solana had both.
While memecoins boosted short-term growth and profits, especially in Q1 2025, the dependence generated can make Solana susceptible to various fluctuations in speculative interest. Moreover, the Standard Chartered report shared with Cointelegraph has suggested that Solana could be seen as a “one-trick pony” unless it manages to diversify its portfolio of options beyond memecoins.
Technical Breakout: Signals of a 40% Drop for SOL Against ETH
The SOL/ETH pair has exhibited a breakout from a rising wedge pattern, according to data published by Cointelegraph on May 29. This chart formation is identified by an increase in price where resistance and support lines converge. The appearance of this pattern, where the price rises but the trading range narrows, usually indicates a loss of momentum in the previous uptrend. Confirmation of its breakdown is considered a relevant signal in technical analysis for this digital asset pair.
When we talk about a breakout, it’s because the pattern is considered bearish, as the price falls and closes below the support line. The technical projection shown by the Cointelegraph article suggests a potential drop of even 40% in the value relationship of SOL to ETH. It has weakened and may favor ETH in the short to medium term, they suggest.
The 50-week Exponential Moving Average (50-week EMA), known among analysts as the “red wave,” stands as a crucial intermediate support for the SOL/ETH pair. This technical level has captured the attention of market observers. According to data shared by Cointelegraph, the approximate mark of 0.0628 ETH is currently offering this intermediate support. This point is key for monitoring the price evolution of the pair in upcoming market movements.
Ethereum Takes the Lead with Its Layer 2 Solutions
Amidst the evolving cryptocurrency market, Ethereum is advancing with its focus on real applications, while Solana has been associated with speculative infrastructure. This dynamic redefines the competitive landscape.
Solana: Speculative Infrastructure
Solana is renowned for its ability to process a high volume of transactions per second (TPS) at a very low cost. This feature has been a strong point for those who prioritize speed in their operations. Memecoins, by offering low transaction fees, facilitated quick entry and exit from positions for retail traders. Additionally, High-Frequency Trading (HFT) allowed for almost automatic operations, multiplying transactions on Solana.
Although Solana includes Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) in its ecosystem, its visibility and relevance have generally been linked to speculative narratives and retail investment.
Ethereum: Infrastructure Focused on Real Applications
For its part, Ethereum has consolidated its leadership as a platform for high-value decentralized applications. This is due to a well-defined scalability strategy that has allowed its growth. Ethereum has improved transaction demand and costs with the creation of Layer 2 (L2) solutions. An L2 is an independent blockchain that extends Ethereum’s capacity and inherits its security, according to Coinbase.
Ethereum’s infrastructure, unlike Solana’s, is designed to support and develop in key areas. These include NFTs, DeFi, Real World Asset (RWA) Tokenization, and Enterprise Applications, among others. This scalability is possible thanks to L2s like Optimism, Arbitrum, and Base. These solutions batch transactions and send them to the main Ethereum chain, offering competitive fees and drastically reducing costs for the user. They also increase processing speed.
The Standard Chartered report states that Ethereum has evolved and gained ground in the crypto ecosystem. Thanks to scalable L2s, its infrastructure is deeper for real applications, which provides diversification and robustness.
Are We Seeing the End of the Memecoin Cycle? Analysis of Speculative Hype Exhaustion
The cryptocurrency market shows signs of a decline in the memecoin cycle. A recent report from Standard Chartered, shared with Cointelegraph, highlights a drop in the speculative enthusiasm that drove their prices. This trend is reflected in a decrease in trading volume and less interest from retail investors in high-risk assets.
As a result of this speculative cooling, Ethereum is gaining ground with its L2 solutions, according to the same Standard Chartered report. This suggests that capital might be reorienting towards assets with real utility and sustainable ecosystems, seeking intrinsic value. Ethereum offers a robust ecosystem that includes its L2 solutions, DeFi, and RWA. It also features Artificial Intelligence (AI) projects applicable to the blockchain and various solid technological developments.
Additionally, chartist Alex Clay has projected a breakdown of the rising wedge in the SOL/ETH pair charts. Clay has also pointed to the possible arrival of an “Ethereum superiority season,” indicating potential superior performance for ETH.
Conclusion: What Can the Crypto Market Learn from This Shift?
The recent rise and fall of memecoins on Solana highlight the need to build market value beyond viral phenomena. While speculative narratives can generate quick returns, their volatility is extreme and their sustainability fragile. This instability can lead to losses for investors and increasing distrust in the market.
What has happened demonstrates that explosive growth driven by speculation is dizzying and fueled by media narratives and viral marketing, proving unsustainable in the long run. In contrast, structural growth is observed in projects with robust technologies, such as Ethereum’s L2s. This growth is based on sustainable ecosystems with practical applications, and while slower, it attracts long-term investors and generates greater loyalty.
The current, constantly evolving market offers a crucial opportunity for the crypto ecosystem to orient itself towards projects with more real foundations. Building a more robust space, less susceptible to speculative bubbles, is an important goal. This can facilitate mass adoption and the recognition of blockchain technology as a pillar capable of generating significant changes in the economy.
As capital moves away from purely speculative assets, doors open for platforms and initiatives with tangible utility. Examples include Ethereum’s scaling solutions (L2s), established DeFi protocols, and the tokenization of RWAs. This adjustment drives the creation of a stronger and more resilient ecosystem, paving the way for the mass adoption of blockchain technology in the real and digital economy.
