Ryan Sean Adams, a crypto investor and strong supporter of Ethereum, notes that some ETH holders are panic selling and diversifying into layer 1 altcoins like Solana (SOL) or Cardano (ADA), primarily concerned about the makes the coin not outperform the market as that is what happened during the last bull cycle when it climbed to around $5,000.
Ethereum Holders Sell Highly Performing Altcoins
In an X job On November 16, Adams said that price action, despite these actions, 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 coin skyrocketed, hitting record highs.
Currently, Ethereum is trading below the $2,000 round number, retreating from a recent high but remaining in a bullish formation. However, it seems that the community is not satisfied with this performance, especially against competitors, mainly SOL and ADA, who are recording impressive gains.
As of this writing on November 16, SOL has not only reversed losses from November 2022 when FTX filed for bankruptcy in the US, but has comfortably broken above key resistance lines, recording new 2023 highs of about $67. To quantify, SOL is up over 200%.
At the same time, Cardano is firm, adding around 70% from the October 2023 low, looking at the price action in the daily chart. By October, ADA had fallen to $0.25, which was discouraging. However, the dramatic recovery at the end of October boosted demand for the coin, pushing it to current levels.
Cardano has struggled in recent months despite continued developments in the ecosystem, including the refinement of network performance during the Basho phase. Several improvements, including pipeline, have been introduced to make the network more scalable and secure. Yet this was not reflected in ADA’s price action until the recent October peak.
ETH remains a “fantastic asset” for retail investors
The difference in performance between Ethereum and competing altcoins, as revealed by price action, could be due to project-related triggers, but mainly the difference in market capitalization. Ethereum is the second most valuable project, behind Bitcoin, whose market capitalization is several times that of the second largest smart contract platform in terms of market capitalization. BNB Channel.
Subsequently, this makes ETH less volatile, forcing its supporters, as Adam notes, to invest in other, more volatile coins. These competing layer 1 altcoins have seen triple-digit gains in the last month alone. Still, even though ETH has only added 30% over the same period, Adams says the coin is a “fantastic asset” on a risk-adjusted basis for the average retail investor.
Featured image from Canva, chart from TradingView