There is a growing concern among Ethereum (ETH) holders as some of them have started panic selling and diversifying their portfolios into layer-1 altcoins like Solana (SOL) or Cardano (ADA). This trend is primarily driven by the fear that Ethereum may not be able to outperform the market as it did in the last bull cycle when it reached an all-time high of around $5,000. Ryan Sean Adams, a crypto investor and vocal Ethereum supporter, expressed his thoughts on this matter in a recent post.
Despite the panic selling and diversification happening among some ETH holders, Adams believes that the price action of Ethereum could rapidly change, even if it no longer remains a 20-100X coin in the eyes of venture capitalists. Drawing parallels to the year 2020, Adams points out that Ethereum experienced a similar trading atmosphere before it started surging to record levels. Currently, Ethereum is trading below the $2,000 mark but remains within a bullish formation. However, the dissatisfaction with Ethereum’s performance, especially in comparison to its competitors like SOL and ADA, is evident.
While Ethereum’s performance has been lackluster, Solana and Cardano have been making significant gains in the market. Solana, in particular, has not only recovered from its losses in November 2022 when FTX filed for bankruptcy in the United States, but it has also surpassed key resistance lines and reached new highs of around $67 in 2023. This corresponds to a remarkable increase of over 200% in Solana’s value. On the other hand, Cardano has also witnessed a steady rise, adding approximately 70% since its October lows of $0.25. The recent spike in ADA’s price was ignited by a strong recovery at the end of October, driven by increasing demand for the coin.
The difference in performance between Ethereum and its competitors can be attributed to various factors, including project-related triggers and market cap. Ethereum currently holds the position as the second most valuable project, trailing only behind Bitcoin. The vast difference in market cap between Bitcoin and Ethereum, as well as other altcoins, makes ETH less volatile in comparison. This forces supporters of Ethereum, like Adams, to divest into more volatile coins such as SOL or ADA. These layer-1 altcoins have shown triple-digit gains in the last month alone, attracting the attention of investors looking for higher returns.
The fear of Ethereum holders is well-founded, as panic selling and diversification into layer-1 altcoins have become prevalent. The underperformance of Ethereum, combined with the impressive gains displayed by SOL and ADA, has fueled this trend. However, it is essential to consider factors like market cap and project-related triggers when analyzing the differences in performance. As the market continues to evolve, it remains to be seen whether Ethereum will regain its momentum or if altcoins like SOL and ADA will dominate the landscape.