Ryan Sean Adams, a crypto investor and outspoken supporter of Ethereum, notes that some ETH holders are panic selling and diversifying into tier-1 altcoins like Solana (SOL) or Cardano (ADA), mainly concerned that the coin may will not outperform the market. That also happened during the last bull cycle, when the price rose to around $5,000.
Ethereum holders are selling for high-performing altcoins
In an X after on November 16, Adams said that despite these actions, price action could change quickly even if ETH is no longer a 20-100x coin in the eyes of venture capitalists. The investor compares the current trading atmosphere to 2020, months before the second most valuable currency surged higher to record levels.
Currently, Ethereum is trading below the $2,000 round number, pulling back from a recent higher but remaining within a bullish formation. Still, it seems that the community is dissatisfied with this performance, especially as competitors, mainly SOL and ADA, are making impressive gains.
At the time of writing on November 16, SOL has not only reversed the losses of November 2022, when FTX filed for bankruptcy in the United States, but has also comfortably moved past key resistance lines, with new 2023 highs around $67. To quantify it, SOL is up over 200%.
At the same time, Cardano is solid, up about 70% from the October 2023 low looking at the price action in the daily chart. By October, the ADA had dropped dishearteningly to just $0.25. However, the stellar recovery at the end of October created demand for the currency, causing it to rise to current levels.
Cardano has struggled in recent months despite ongoing ecosystem developments, including the refinement of the network’s performance during the Basho phase. Several improvements, including pipelining, have been introduced to make the network more scalable and secure. Yet this was not reflected in ADA’s price action until the recent peak in October.
ETH remains a “fantastic asset” for retail investors
The difference in performance between Ethereum and competing altcoins, as price action shows, could be due to project-related triggers, but mainly due to the difference in market capitalization. Ethereum is the second most valuable project after Bitcoin, whose market cap is many times higher than even the second largest smart contract platform by market cap, BNB Chain.
This then makes ETH less volatile, forcing supporters, as Adam notes, to invest in other, more volatile coins. These competing layer-1 altcoins have posted triple-digit gains in the past month alone. Nevertheless, even with ETH adding just 30% over the same period, Adams claims the coin is a “fantastic asset” on a risk-adjusted basis for the average retail investor.
Feature image from Canva, chart from TradingView
