Ethereum May Continue Attracting Liquidity from Solana Amid DeFi Growth and Market Shifts

• Ethereum (ETH) is increasingly attracting investor capital away from Solana (SOL), signaling a significant liquidity rotation within the Layer 1 blockchain sector.

• Recent data reveals that ETH accounted for over 64% of all bridged liquidity in the past 24 hours, underscoring growing market confidence in its DeFi ecosystem and long-term potential.

• According to COINOTAG analysis, the SOL/ETH trading pair exhibits repeated resistance rejections, indicating sustained momentum favoring Ethereum’s market dominance.

Ethereum’s liquidity inflows surge as investors shift from Solana, driven by DeFi growth and market outperformance, highlighting ETH’s strengthening dominance in crypto.

Ethereum’s Liquidity Inflows Surge Amid Solana Outflows

Over the last 24 hours, Ethereum has experienced a notable influx of liquidity, with net inflows reaching approximately $1.7 million. This figure represents 64.52% of all bridged assets during the same period, highlighting a decisive capital rotation from Solana to Ethereum. Market participants appear to be reallocating their holdings in favor of Ethereum, reflecting confidence in its robust ecosystem and resilient price performance.

The trend is further supported by trading activity on the SOL/ETH pair, where repeated rejections at key resistance levels suggest persistent selling pressure on Solana relative to Ethereum. This pattern indicates that investors are favoring ETH’s established infrastructure and DeFi capabilities as a safer, more promising investment within the Layer 1 space.

Source: Artemis

DeFi Sector Growth Fuels Ethereum’s Appeal

The growth of Decentralized Finance (DeFi) continues to be a pivotal factor in Ethereum’s expanding market share. Over the past week, the DeFi sector has surged by 12.5%, outpacing other blockchain sectors and contributing significantly to Ethereum’s ecosystem gains of 5.9% during the same timeframe.

Ethereum’s Total Value Locked (TVL) currently stands at an impressive $65.77 billion, making it the largest ecosystem by TVL globally. This substantial liquidity base underscores Ethereum’s dominant position in DeFi, attracting both retail and institutional investors seeking exposure to decentralized financial services.

Source: Artemis

Ethereum Outperforms Traditional Markets, Enhancing Investor Confidence

Ethereum’s performance over the past year has notably surpassed traditional financial benchmarks, further solidifying its appeal among investors. With a 12-month return of 21%, ETH has outperformed the S&P 500’s 13.7% gain, positioning itself as a compelling asset for those seeking risk-adjusted growth opportunities.

This outperformance is largely attributed to Ethereum’s foundational role in DeFi and smart contract applications, which continue to drive demand and network utility. The increasing integration of Ethereum-based solutions across various sectors reinforces its status as a leading blockchain platform.

Source: Artemis

Technical Analysis Suggests Continued ETH Dominance Over SOL

Technical indicators on the SOL/ETH trading pair reveal a persistent downtrend for Solana relative to Ethereum. The chart shows that the pair has encountered a key descending resistance line multiple times, triggering pullbacks that coincide with increased ETH buying pressure.

This fractal resistance pattern suggests that the current liquidity rotation favoring Ethereum is likely to persist, as investors capitalize on ETH’s perceived stability and growth prospects. The repeated rejections at resistance levels emphasize a market consensus leaning towards Ethereum’s continued dominance in the Layer 1 blockchain hierarchy.

Source: TradingView

Conclusion

The current market dynamics indicate a clear shift in investor preference towards Ethereum, driven by its strong DeFi ecosystem, superior liquidity inflows, and consistent outperformance against both Solana and traditional markets. Technical analysis supports the view that ETH’s dominance is poised to strengthen further as liquidity continues to rotate from SOL. Investors seeking exposure to Layer 1 blockchains should closely monitor these trends, as Ethereum’s robust fundamentals and market positioning make it a compelling choice for sustained growth.