Solana, Base, Arbitrum pull $86M from Ethereum week after Trump overruled DeFi KYC law

Ethereum price tumbles below $1,600, a week after Trump repealed the DeFi KYC mandate, as investors react by redirecting capital towards Solana and other rival DeFi networks. 

Ethereum performance lags as markets reacts to Trump’s DeFi law repeal

Ethereum’s dominance in decentralized finance (DeFi) is under intense pressure this week, triggering bearish tensions in the ETH spot markets. On Wednesday, Ethereum price languished below the $1,600 level, while BTC flipped to $85,000.

As a sudden NVIDIA sell-off prompted investors to rotate funds from US stock markets towards crypto assets, top altcoins like Bitcoin Cash and Litecoin also saw mild gains. 

Ethereum price performance 

However, on-chain data shows that Ethereum’s persistent underperformance could be linked to swings in capital flows with the global DeFi sector. 

On April 10, Trump signed an executive order nullifying a Biden-era policy that required DeFi protocols to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

The reversal has been hailed as a win for crypto-native platforms and open financial infrastructure—but for Ethereum, the aftermath has been decisively negative.

Just one week after the former U.S. President Donald Trump repealed the law, investors have persistently shifted assets out from Ethereum into other rival networks. 

Solana captures 60% of outflows as investors withdraw $86M from Ethereum

According to data from Wormhole, Ethereum’s largest cross-chain bridge, Solana absorbed the lion’s share of the outflows, drawing over $54 million—roughly 62% of the total. Base, Arbitrum, and Avalanche followed with $9.6 million, $5.8 million, and $3.9 million in inflows respectively.

Ethereum Cross Chain transaction flows | Source: Wormhole Bridge

Most Solana-bound assets were funneled into high-velocity DeFi protocols like Jupiter, Kamino, and MarginFi, which have seen surging volumes amid Solana’s improved scalability and lower fees.

Solana DeFi Total Value Locked, April 16 2025 | Source: DeFillama 

The move sparked a strong market response. Solana’s total value locked (TVL) surged 12% over the past week, climbing from $6.1 billion on April 9 to $6.9 billion as of April 16, according to DeFiLlama.

More than $800 million in fresh capital was deployed across Solana-based protocols during that period.

Solana’s native token SOL also rallied, gaining 21% in the past week to trade at $135. In comparison, Ethereum’s price rose just 8%, underperforming nine of the top 10 cryptocurrencies by market capitalization.

Ethereum's long-term market share at risk

The sharp capital rotation suggests that Ethereum’s long-standing lead in DeFi could be eroding as developers and users seek faster, lower-cost environments.

While Ethereum still leads in total value locked—with over $80 billion—it is increasingly being challenged on performance metrics and user experience.

The DeFi migration trend appears to be part of a broader shift. Institutional investors pursuing real-world asset tokenization and onchain securities issuance are increasingly exploring alternatives like Avalanche and Hedera, which offer native compliance tooling and low fees.

Meanwhile, Solana and Cardano continue to dominate the retail trading and memecoin space due to their scalability and community traction.

Solana Price Forecast: Bulls eye $139 as RSI momentum builds above midline

After initial fears from FTX payouts at the start of the month, Solana price action has regained bullish momentum, reclaiming $132 with a 5.01% gain on Wednesday. 

A closer look at vital technical indicators suggests further upside toward the $139 resistance marked by the Keltner Channel upper band.

The 12-hour chart shows a clear rejection from the midline support at $124.62, with bullish volume expanding, the 3.64M SOL traded indicates renewed buyer interest.

Solana Price Forecast

Solana price forecast signals further bullishness as the Relative Strength Index (RSI) currently prints 57.86, comfortably above its signal line at 54.84.

This crossover confirms positive momentum building while remaining below overbought levels, suggesting room for continuation.

While downside risk to $124.62 remains possible in a pullback scenario, as long as Solana holds above the midline, the path of least resistance is upward. A breakout above $139.57 would open the door to a potential rally toward $145.