Ethereum Faces $60M Outflow Amid Solana ETF Hype and Network Growth

Ethereum (ETH) investment funds witnessed outflows worth $60.70 million in the week ending June 29, right around the time investment firms VanEck and 21Shares filed spot exchange-traded fund (ETF) applications for Solana (SOL), its top layer-1 blockchain rival.

Ethereum is Worst-Performing Crypto Regarding Net Flows

According to CoinShares’ weekly report, it was Ethereum funds’ largest weekly outflow since August 2022. Meanwhile, over the past two weeks, the total outflows have reached $119 million, making Ethereum the worst-performing asset year-to-date in terms of net flows.

In comparison, Solana-specific investment funds witnessed $1.6 million in inflows in the week ending June 29, helped by the buzz regarding the potential approval of their spot ETFs in the United States. Meanwhile, on a year-to-date timeframe, these SOL funds have attracted $41 million so far.

That is despite the potential launch of Spot Ethereum ETFs launch in July after the U.S. Securities and Exchange Commission’s (SEC) nod to its filings in May. However, the launch has been delayed beyond the initially predicted date of July 2, which Bloomberg ETF analyst Eric Balchunas had predicted earlier.

Solana is Beating Ethereum on Key Network Metrics

The stark contrast in net fund flows between Solana and Ethereum highlights their differing performances as layer-1 blockchains. For instance, Solana is outperforming Ethereum so far in 2024 in terms of the total-value-locked (TVL) growth.

For the unversed: A TVL is a key metric indicating the amount of assets being staked or used in the blockchain’s decentralized finance (DeFi) ecosystem.

As of July 2, the Solana blockchain network’s TVL, calculated in its native token SOL, had risen 121% year-to-date. In comparison, the Ethereum blockchain network’s TVL was up 31.58% in the same period.

The disparity suggests that more investors and users are shifting their assets to Solana, attracted by its cheaper transaction costs.

For instance, Solana’s decentralized exchange (DEX) volumes have increased by circa 15% on a 30-day adjusted timeframe, while Ethereum’s DEX volumes have gone down by approximately 25% in the same period.

Similarly, the explosive growth of Solana’s memecoin sector, particularly of coins like Dogwifhat (WIF) and Popcat (POPCAT), has outperformed most Ethereum-based joke cryptocurrencies.

Solana vs Ethereum memecoins. Source: Messari

Ethereum Price Prediction: ETH/USD May Hit $3,700 in July

From a technical perspective, Ethereum’s native token, Ether (ETH), is eyeing a rally toward $3,700 in July if it decisively closes above its 50-day exponential moving average (50-day EMA; the red wave) at around $3,475.

The upside target coincides with two historical levels: ETH’s horizontal support level from the May-June session and its multi-month descending trendline resistance. Traders have targeted both levels in recent history after ETH’s bounce from its ascending trendline support, akin to the current price action.

Conversely, a break below the support confluence—comprising Ether’s resistance-turned-support bar (the red area) and ascending trendline—risks pushing the price toward the 200-day EMA (the blue wave) at around $3,100.