Traders eye SOL/ETH reversal amid memecoin fallout

Cryptocurrency traders are eyeing a potential reversal in the ratio of SOL (SOL) to Ether (ETH) as a series of memecoin scandals sours sentiment on the Solana network. 

After peaking at more than 0.08 SOL per 1 ETH, the SOL/ETH ratio reversed course on Feb. 15, declining to as low as around 0.06 SOL/ETH on Feb. 18, according to data from TradingView. 

“Solana’s narrative as the best retail onboarding chain has just flipped to being associated with scammy behavior and insider trading, this will take time to rectify,” Andy, co-founder of venture firm Rollup Ventures, said in a Feb. 17 post on the X platform. 

Meanwhile, “Ethereum is ready for mainstream adoption. Tides are shifting,” Andy said, adding that the SOL/ETH ratio is a barometer for shifting market sentiment. 

Related: Solana shorts spike amid memecoin scandals

Solana’s memecoin implosion 

Since mid-2023, SOL has dramatically outperformed ETH, with the SOL/ETH ratio rising more than tenfold during the period, according to TradingView. 

Solana’s explosive growth — the chain’s total value locked (TVL) increased from around $1.4 billion to more than $9 billion in 2024, according to DefiLlama — was largely driven by memecoin trading.

On Feb. 14, Libra (LIBRA), a memecoin seemingly endorsed by Argentine President Javier Milei, erased some $4.4 billion in market capitalization within hours of launching. 

In the past 48 hours, the ensuing fallout has contributed to the price of SOL dropping by more than 15%.

Now, traders are scrutinizing the role of popular Solana applications, such as Meteora, in the ill-fated LIBRA launch. 

In a Feb. 17 X post, Beanie, an investor at venture firm Gm Capital, claimed Solana-based decentralized exchange (DEX) Meteora “is sniping its own tokens.” Sniping generally means buying up a token early and then selling soon after for quick gains.

“It seems almost unbelievable. Cause the platform made > $300M the past month and $40M on the day of Libra launch alone off fees. But this is what’s happening,” Beanie claimed in the post. Cointelegraph has not independently confirmed Beanie’s statement. 

More generally, “the amount of shit thats coming up to the surface now is really badly damaging to SOL ecosystem,” Runner XBT, a pseudonymous trader, said in a Feb. 16 X post.

Quiet progress on Ethereum

Ethereum’s spot price has struggled since March 2024, when the network’s Dencun upgrade cut transaction fees by approximately 95%. 

“There wasn’t enough volume to make up for the fee decline, so investors have become less constructive about the chain,” Matthew Sigel, an analyst at asset manager VanEck, said in September.

Now, Ether is looking comparatively strong. It staged a nearly 30% rebound in February, recovering from local lows of around $2,150. 

Since March 2024, data posted to Ethereum by layer-2s has more than tripled, driving up fee revenues for mainnet, according to data from Dune Analytics. 

Ethereum has also benefited from extensive development activity in areas such as real-world assets (RWA) and agentic artificial intelligence.

With AI development, “a lot of people assume it’s [mostly] happening on Solana,” Matt Hougan, asset manager Bitwise’s head of research, told Cointelegraph in December. “Actually, a lot of it is happening in the ETH ecosystem.”

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