Ryan Sean Adams, a crypto investor and a vocal Ethereum supporter, notes that some ETH holders are panic selling and diversifying into layer-1 altcoins like Solana (SOL) or Cardano (ADA), primarily concerned about That the coin may not outperform the market happened in the last bullish cycle when it rose to almost $5,000.
Ethereum holders are selling for high-performing altcoins
in an x Post On November 16, Adams said that despite these actions, price action could change rapidly, even if ETH is no longer a 20-100X coin in the eyes of venture capitalists. Investors compare the current trading environment to 2020, a few months before the second-most valuable coin hit record highs.
Currently, Ethereum is trading below the round number of $2,000, coming off recent highs but remaining in bullish territory. Nevertheless, it appears that the community is dissatisfied with this performance, especially as competitors, primarily SOL and ADA, are making impressive profits.
As 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 crossed key resistance lines, with a new 2023 high of around $67. Altitude is recorded. To quantify, SOL has surged by over 200%.
Also, Cardano is holding firm and is adding almost 70% from the October 2023 lows looking at the price action in the daily charts. By October, ADA had fallen discouragingly to $0.25. However, a spectacular recovery in late October boosted demand for the coin, driving it to current levels.
Cardano has been sluggish in recent months despite continued ecosystem development, including refinements to network performance during the Basho phase. Several enhancements, 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 surge in October.
ETH remains a “fantastic asset” for retail investors
The difference in performance between Ethereum and competing altcoins, as shown by price action, may be due to project-related triggers but mainly differences in market cap. Ethereum is the second most valuable project after Bitcoin, with a market cap many times that of BNB Chain, the second largest smart contract platform by market cap.
Subsequently, this makes ETH less volatile, forcing supporters, as Adam notes, to divest into other more volatile coins. These competitive layer-1 altcoins have posted triple-digit gains in the last month alone. Nonetheless, despite ETH only rising 30% over the same period, Adams argues that the coin is a “fantastic asset” on a risk-adjusted basis for the average retail investor.
Feature image from Canva, chart from TradingView