Rotation out of ETH into SOL causes another surge in bearishness

Ethereum fear, uncertainty, and doubt (FUD) have spiked again amid an apparent rotation into Solana (SOL), while ETH price in terms of BTC has fallen to its lowest level for three and a half years.

The widening gap between Bitcoin and Ether (ETH) comes amid increased bearish sentiment for the asset and the rise of competing blockchains such as Solana (SOL).

SOL has gained around 17% over the past seven days, while ETH has been mostly stagnant, and some observers view this as a rotation out of ETH.

On Oct. 24, Cointelegraph reported that Solana has surged by approximately 600% against Ethereum since 2023, primarily driven by memecoin mania.

The rise of Solana against Ethereum has sparked discussions about its potential to flip Ethereum’s market capitalization. However, it has a long way to go with Ethereum’s market cap currently over $300 million while Solana’s is just $82 million, according to CoinGecko.

Meanwhile, the ETH/BTC ratio has fallen to its lowest level since April 2021, reaching 0.037 on Oct. 24, according to TradingView, as Ether prices continued to retreat while Bitcoin recovered.

ETH has fallen around 9% since its two-month high of $2,760 on Monday, Oct. 21, dipping below $2,500 on Thursday. Meanwhile, Bitcoin has recovered almost all of its losses during this week’s market retreat, tapping $68,820 during late trading on Oct. 24, according to CoinGecko.

ETH/BTC ratio. Source: TradingView

Ethereum developers and advocates have been coming to the blockchain’s defense, with one core developer commenting on the blockchain’s so-called “flaws.”

In an X post on Oct. 24, core developer Eric Connor brushed off criticism about layer-2 user experiences, fragmented liquidity, and development speed, arguing Ethereum remains the leading smart contract platform committed to true decentralization, with significant institutional adoption and developer activity.

“I’ve always said Ethereum is a multi-decade play but it’s still on the right path to being the true winner.”

Meanwhile, independent trader Bob Loukas admitted to being critical of Ethereum stating “What we’re seeing is more just a repricing of where the economic activity is and what people are using these [layer-2] chains for ‘today’,” as value gets distributed across the ecosystem.

Related: Bitcoin dominance hits 3.5-year high as altcoins get left behind

Ethereum educator Anthony Sassano commented that most of the FUD appears to be related to ETH’s underperformance.

“It just seems like these complaints only exist when ETH is trading weakly against other assets – price drives sentiment,” he said in a post on X on Oct. 24.

Founder of Solana developer tools firm Helius, Mert Mumtaz, reiterated his support for the Ethereum ecosystem in a post on X on Oct. 25.