Ethereum Price Analysis: What Next for ETH as Traders Swap $86M into Solana DeFi protocols ?

Ethereum price tumbles below $1,600 facing pressure amid $86 million DeFi capital flight to faster, low-cost rivals like Solana.

Capital Rotation Into Solana Spurs Concerns for Ethereum’s DeFi Dominance

Ethereum (ETH) is facing renewed competitive pressure after nearly $87 million in assets migrated from its ecosystem to rival blockchains in the week following former U.S. President Donald Trump’s repeal of a controversial decentralized finance (DeFi) regulation.

On April 10, Trump signed a bill overturning a Biden-era mandate requiring DeFi protocols to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) rules. The reversal was widely interpreted as a win for crypto-native projects, removing a major regulatory overhang that threatened the sector’s permissionless structure.

But for Ethereum — the current hub of DeFi liquidity — the impact has been less than favorable.

According to data from Wormhole, the largest cross-chain bridge on Ethereum, Solana captured the lion’s share of outflows with over $54 million redirected into its ecosystem. Base, Arbitrum, and Avalanche followed, attracting $9.6 million, $5.8 million, and $3.9 million, respectively.

Rapid Transfers from Ethereum Sparks 21% rally for Solana

Notably, the Solana-bound assets were funneled into DeFi protocols such as Jupiter, Kamino, and MarginFi.

Based on the latest data from DefiLlama, Solana TVL has been on a steady rise since Trump’s signing repealed the DeFI law last week.

As seen in the chart above, Solana TVL increased 12% from $6.1 billion on April 9, to hit the $6.9 million mark at press time on Wednesday, April 16. This shows that investors deposited over $800 million into various Solana native Defi protocols over the past week. 

With Solana price currently trading at $135, up 21% on the weekly timeframe. Comparatively, Ethereum price is trading below $1,600 mark, with its 8% gain on the weekly candle, reflecting second lowest returns among the top 10 ranked crypto assets. 

Looking Ahead:

The DeFi fund flows observed on the Wormhole bridge further reinforce the narrative that Ethereum could be losing market dominance, as deepening regulatory clarity encourages investors to switch towards rival Layer-1 and Layer-2 protocols. 

The ongoing migration trend from Ethereum to faster, lower-cost networks. Ethereum still leads in total value locked (TVL), but this week’s data is a clear signal of shifting momentum.

More so, major institutional players venturing into crypto on new themes like Real-world Asset and securities Tokenization are increasingly opting for alternative layer-1 protocols like Hedera, Avalanche, while Solana and Cardano maintain a strong hold on retail dominance. 

Solana, which suffered from performance concerns in 2022, has staged a significant turnaround in both uptime and developer activity.

The network processed over 60 million daily transactions this week, far surpassing Ethereum’s 1.1 million, and maintained average fees below $0.01, according to data from Solana Explorer.

Ethereum Price Forecast: ETH Eyes $1,700 Rebound as Momentum Shifts

Ethereum price forecast charts show early signs of a potential rebound after closing at $1,592.60, gaining 0.24% on the day.

The Bollinger Bands are starting to compress, suggesting a volatility squeeze, with the mid-band resistance at $1,695.42 acting as the first upside target. ETH price is currently attempting to reclaim ground within the lower half of the bands, signaling the possibility of a bullish reversal.

The Parabolic SAR dots have flipped below the candlesticks, which is a classic buy signal in trend-following strategies.

This adds further weight to a bullish Ethereum price forecast, especially as the MACD histogram shifts into green territory for the first time in weeks. The MACD line is rising toward the signal line, suggesting bullish momentum may soon dominate.

If ETH clears $1,695, a push toward the upper Bollinger Band at $1,960 becomes plausible. However, failure to maintain current support near $1,430, ETH price risks a retest of $1,397.19, where the SAR last confirmed support.