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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 that the coin may not outperform the market as it did in the last bull cycle when it soared to around $5,000.
In an X post on November 16, Adams said price action, despite these actions, might rapidly change 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 turned higher, surging to record levels.
Presently, Ethereum is trading below the $2,000 round number, pulling back from a recent higher but remaining within a bullish formation. Still, it appears the community is dissatisfied with this performance, especially with competitors, primarily SOL and ADA posting impressive gains.
As of writing on November 16, SOL has not only reversed losses of November 2022 when FTX filed for bankruptcy in the United States but has comfortably surged past key resistance lines, registering new 2023 highs of around $67. To quantify, SOL is up by over 200%.
At the same time, Cardano is firm, adding roughly 70% from October 2023 lows, looking at price action in the daily chart. By October, ADA had discouragingly sunk to as low as $0.25. However, the stellar recovery at the tail end of October sparked demand for the coin, driving it to present levels.
Cardano has been slugging in recent months despite the continuous ecosystem developments, including the refinement of the network’s performance during the Basho stage. Several enhancements, including pipelining, have been introduced to make the network more scalable and secure. Still, this didn’t reflect in ADA’s price action until the recent spike in October.
The difference in performance between Ethereum and competing altcoins, as price action reveals, could be due to project-related triggers but mainly the difference in market cap. Ethereum is the second most valuable project, only trailing Bitcoin, whose market cap is multiples higher than even the second largest smart contract platform by market cap, BNB Chain.
Subsequently, this makes ETH less volatile, forcing supporters, as Adam notes, to divest into other more volatile coins. These competing layer-1 altcoins have registered triple-digit gains in the last month alone. Nonetheless, even with ETH only adding 30% in the same period, Adams argues that the coin is a “fantastic asset” from a risk-adjusted basis for the average retail investor.