Solana–Ethereum Correlation and Volatility

SOL–ETH Correlation

In 2025, Solana and Ethereum have been moving like cousins — not identical twins, but close. Their price correlation has mostly sat in the +0.7 to +0.8 range over the past year (CME Group data), which is strong enough to say they generally rise and fall together. The 1-year rolling figure is 0.79, almost lockstep. Pull the lens in and you’ll still see it: 90-day correlation near 0.70, and over the last month anywhere between 0.59 and 0.74 depending on short-term noise. For context, earlier years were looser, just 0.35–0.63, so this cycle looks tighter, more mature.

What does ~0.7 actually mean? Simply: when ETH rips, SOL usually tags along. Same on the way down. That pattern has been clearest during big market-wide shifts — macro news, or when Bitcoin sets the tone. BTC, ETH, and SOL even share about a +0.4 correlation with the Nasdaq-100, showing how much Wall Street sentiment seeps into crypto. Still, 0.7 isn’t 1.0. That gap leaves plenty of room for breakouts or breakdowns when something specific hits one chain. And 2025 gave us several of those — decoupling episodes where the charts stopped lining up for a while.

Solana–Ethereum Correlation Coefficients

30-day correlation: 0.59 – 0.74

90-day correlation: ~0.70

1-year rolling correlation: 0.79

Historical average: 0.35 – 0.63

One reason the correlation has held up better lately: Solana stopped breaking down. The network ticked over 17 months of flawless uptime (last outage was Feb 6, 2024). That’s a credibility boost — investors aren’t pricing in sudden halts anymore, which means SOL trades more like ETH under normal conditions. When the waters are calm, you can bet they’ll move in sync. But add stress or a big catalyst? That’s when the link stretches, sometimes snaps.

Volatility Showdown: SOL vs ETH vs BTC

Solana doesn’t just move — it lurches. The coin has held onto its “high-beta” label in 2025. Over the past quarter, SOL’s 90-day realized volatility hit ~80%. That’s roughly one-third higher than Ethereum’s ~60% and almost double Bitcoin’s ~41%. Put plainly, the chart for SOL looks like a seismograph compared to ETH’s rolling hills or BTC’s calm plateau. CME even notes it outright:

Solana trades with swings “twice as high as bitcoin and nearly one third higher than ether.”

Options traders see it the same way. Implied volatility — the market’s best guess at what’s coming — spiked right after SOL’s manic week in which it jumped +23% in seven days, including a 15% single-day rip. Short-term IV shot to ~76%. Even the one-month tenor has been sitting high, bouncing between 58% and 75%. Compare that with Ethereum: ~66–70% implied vol. And Bitcoin? Low 30s. ETH options in 2025 already trade at about 2× the premium of BTC’s, yet Solana often overshoots ETH too, making it the most expensive ticket in the volatility theater.

90-day realized volatility

• Solana: ~80%
• Ethereum: ~60%
• Bitcoin: ~41%

7-day implied volatility

• Solana: 76%
• Ethereum: ~70%
• Bitcoin: ~35%

30-day implied volatility

• Solana: 58–75%
• Ethereum: 66%
• Bitcoin: ~32%

Why care? Because portfolio math changes when SOL’s involved. A 5% SOL allocation carries way more daily risk than the same slice in ETH or BTC. That’s why it outshines in rallies, yet bleeds heavier in pullbacks. Early 2025 made that crystal clear. Traders who treat SOL as a leveraged ETH proxy aren’t wrong — just exposed.

The market’s message right now: expect the swings to continue. Bitcoin looks steady, almost boring, as ETFs sucked out volatility (BTC ATM vols dropped below 35%). Ethereum has taken on more “altcoin-like” bursts during speculative phases. Solana? Still the firecracker. The double-edged sword: outsized upside in risk-on phases, and brutal downside when the tide goes out.

Timeline of Key Decoupling Events (2025)

Most of the time SOL and ETH march together. But 2025 threw curveballs — moments where the charts peeled apart and told very different stories. Four stand out.

January 2025 – Solana Memecoin Frenzy

Mid-January turned into a Solana-only party. SOL ripped +26.2% that month while ETH actually slid -2.7%. The spark was the launch of the $TRUMP and $MELANIA memecoins, which drove fees to record highs and pushed SOL near $294. Some of that mania centered on the Official TRUMP coin, which itself soared to ~$74 before crashing later in the year — a token whose volatile path we broke down in this research. Ethereum, lacking a comparable catalyst, lagged badly, marking one of the sharpest short-term SOL–ETH decouplings of 2025.

February 2025 – Macro Sell-off (SOL Hit Harder)

Then came the comedown. In early Feb, global risk-off mood hammered crypto. Both majors fell, but SOL cratered -40.6%, while ETH dropped -30.1%. High-beta in action. Profit-taking from January’s blowout plus macro jitters left Solana exposed. Correlation technically held (both red), yet SOL’s deeper crash reminded traders: when things break, Solana breaks harder.

June 2025 – Network Stability Boost

June didn’t bring price fireworks, but it mattered. Solana quietly chalked up 16 months of flawless uptime (since its last halt on Feb 6, 2024). Prices? Flat to down a couple percent, same as ETH. But psychologically, a stable chain resets expectations. Investors stopped worrying about random outages, so SOL’s movements began syncing more closely with broader market flows. Call it a structural repair rather than a decoupling.

August 2025 – Ethereum ETF Surge (SOL Lagging)

August flipped the script again. On Aug 11, U.S. spot ETH ETFs saw $1B in inflows. ETH popped ~20% in days, sprinting to multi-year highs. Solana? Barely moved. For nearly a week SOL sat flat while capital rushed exclusively into ETH. The correlation dipped sharply. Only once the ETF sugar high cooled did some money rotate into SOL. A textbook case of institutional flow creating a temporary decouple. Traders watching closely could have played the spread — long SOL vs short ETH — but timing mattered.

Structural Drivers and Market Trends

Decoupling events make headlines, but the deeper story is in the slow-moving structures shaping SOL–ETH behavior. Four stand out in 2025.

Rotation of Capital

The old crypto playbook still works: Bitcoin pumps → Ethereum follows → Solana and alts catch fire. Every bull cycle has run this script. 2025 hasn’t been different. BTC ripped early in the year, ETH grabbed the baton with a ~40% surge in May, and Solana flexed in April — +17% vs ETH’s -1.5%. For traders, Bitcoin dominance is the tell. When BTC slows and ETH heats up, altseason isn’t far. That’s usually the cue to overweight Solana before the next rotation wave. Miss that window and you’re chasing.

SOL/ETH Valuation Shifts

Over 18 months, Solana has been clawing ground from Ethereum. The SOL/ETH ratio climbed from 0.0444 in Jan 2024 to 0.0613 by June 2025 (+37.8%). In April it even spiked to an ATH of 0.0868. That’s not noise. Behind it: activity and volume. $156B monthly average trading volume in 2025, up 25% YoY, while ETH grew only 9.7%. As a result, Solana’s slice of SOL+ETH volume rose from 20.6% in 2024 to 23.6% in 2025.

But by August, the momentum flipped. According to Glassnode, the SOL/ETH hot capital ratio slid to a YTD low of 0.045 after peaking in spring. Ethereum saw record short-term inflows around July 29, while Solana’s capital rotation stalled and then reversed. The cooldown has been sharper for SOL, marking a phase where ETH once again led the flow of institutional capital.

Macro and Cross-Asset Correlations

Zoom out, both chains still breathe the same air as equities. +0.4 correlation to the Nasdaq ties them to tech sentiment. Fed hawkish? Stocks dump, crypto dumps — SOL and ETH together. Risk-on liquidity wave? Both lift. But Solana exaggerates every move. A modest stock slide might push ETH down 5%, while SOL coughs up 10%. Macro sets the stage, Solana writes the drama. That magnifier effect can briefly stretch the SOL–ETH link, even though they’re reacting to the same backdrop.

Network Differentiation

At the same time, narratives aren’t just technical. They’re social — sometimes messy. Solana’s identity has been shaped as much by community-driven hype as by throughput metrics, and that cuts both ways.

In August, Karbon argued that a “legacy group of Solana KOLs” has become more of a drag than a driver, hurting both the network and the price.

Yet the same week, Mert from Helius reminded followers of Solana’s culture of meme-driven confidence, joking that “if SOL doesn’t break $600 I cut my beard and glue it on my head”.

Humor aside, Solana’s fundamentals are also strengthening: DeFiLlama data shared by Mert shows Solana’s TVL trending back toward all-time highs, signaling rising liquidity and usage despite the noise.

Implications for Traders and Portfolio Strategy

So what do all these numbers, correlations, and one-off events actually mean for someone trading or allocating capital? A few clear lessons.

Expect Co-Movement, But Don’t Blindly Hedge

Correlation around 0.7 means ETH and SOL usually head in the same direction. Hedging a SOL long with an ETH short sort of works — it’ll cover big market moves. But it’s never perfect. January’s memecoin rally showed that an ETH short wouldn’t have saved you on the upside. August’s ETF surge showed the opposite: SOL lagged while ETH ripped, so a hedge there could have backfired. If you’re using ETH as a proxy hedge, keep it dynamic. Adjust ratios around known catalysts — Solana network upgrade? Scale back ETH hedges. Ethereum ETF inflows? Don’t assume SOL will follow.

Use Solana’s Beta (If You Can Handle It)

SOL’s ~80% realized volatility is both weapon and landmine. It behaves like a levered ETH. If you’re bullish the market, SOL often delivers the bigger percentage gains. Some traders pair it: long SOL vs short BTC to amplify upside while muting broad market exposure. On the flip side, shorts or puts on SOL can pay harder when the tide turns than similar ETH bets. The trick? Sizing. A small SOL position can swing like a big ETH one. Tight stops are mandatory. And remember: options on SOL aren’t cheap — IV near ~75% means premiums bite. Selling that vol looks tempting, but one bad move and you’re wrecked.

Spot the Decoupling Early

When SOL and ETH suddenly part ways, it’s usually because a story is building. January 2025? On-chain activity and fees on Solana exploded during the $TRUMP and $MELANIA token craze. August? ETF inflow reports signaled ETH demand before the rally hit.

Analysts have also flagged the ratio shift itself: by early August, the SOL/ETH pair had already fallen 50% since April 2025, a slide tied to cooling memecoin demand and Ethereum’s growing pull as the institutional favorite.

Tracking these inflection points often comes down to watching flows and big wallets. Some traders monitor entities like Machi Big Brother, the polarizing NFT whale and DeFi veteran whose massive moves frequently unsettle markets. Spotting that kind of activity early can be the edge in playing relative trades — but timing is brutal.

Portfolio Allocation: Risk vs Reward

For longer-term managers, volatility matters as much as correlation. Solana’s swings mean a 5% allocation in SOL carries more risk weight than 5% ETH or BTC. From Jan 2024 to Jun 2025, SOL outperformed ETH by ~38% — so overweighting has paid — but the drawdowns are harsher. A balanced stack still makes sense: Bitcoin as ballast, ETH as middle ground, Solana as the growth kicker. Just expect to rebalance often. SOL can balloon in weight after rallies or crater after a bad month.

Watch the Structural Shifts

Correlations aren’t carved in stone. Solana’s 16-month uptime streak already nudged it toward more predictable co-movement with ETH. If it strings together years of reliability and gets institutional products (an ETF, for instance), it might start behaving more like Ethereum: still volatile, but less rogue. Flip side, if Ethereum hits a regulatory snag or Solana faces another technical failure, expect fresh decoupling. The job is staying alert to these structural pivots — they reshape correlation regimes faster than historical averages suggest.