Why Ethereum Underperforms Bitcoin, Solana, Nvidia, Meta, Apple and Others

• Ethereum has underperformed key assets in and out of the crypto market.
• Ethereum is an innovation at the level of human civilization, but it is mispriced due to the lack of killer applications, says the co-founder of F2pool.
• Ethereum could drop to $2,111 if it fails to recover the $2,400 support level.

Ethereum (ETH) fell 2% on Thursday after a key analysis showed that the top altcoin underperformed actives including Bitcoin, Solana, Nvidia, Meta, Apple, Gold and others. CryptoQuant analysts and F2pool co-founder look at why ETH has underperformed and what investors should expect.

Daily Market Reasons: Is Ethereum Underperforming or Undervalued?

According to Ecoinometrics, Ethereum has been the worst performing asset among large-cap assets to date. While Nvidia, Meta, Bitcoin, Apple, Gold, Google, Amazon, NASDAQ and Microsoft posted gains of 142%, 48%, 38%, 22%, 19%, 18%, 18% and 12% respectively , Ethereum is struggling with a yield of just 9%.

In anticipation of Ethereum’s second anniversary The Merge, which marks the transition to a proof-of-stake consensus mechanism, CryptoQuant analysts noted that the top altcoin battles began after the event. According to analysts, Ethereum has outperformed Bitcoin, Solana and BNB by 44%, 53% and 18% respectively since The Merge.

CryptoQuant analysts noted that some key reasons for the poor performance include a lower number of transactions on the mainnet, which caused transaction fees to drop. In addition, the supply of Ethereum has increased and may not maintain its deflationary status again. Analysts attributed the rising supply and weak network activity to Dencun’s March upgrade, which introduced a new architectural dynamic to Ethereum.

Considering the FUD following ETH’s poor performance, Shenyu, co-founder of F2pool, noted that Ethereum is still an innovation at the level of human civilization and the market is underestimating its value because the killer applications have not yet appeared.

“As investors, we have to tolerate this kind of mispricing and volatility to make real profits,” Shenyu said.

Meanwhile, Ethereum ETFs posted a second consecutive day of negative flows, with net outflows of $37.5 million. Grayscale’s ETHE saw outflows of $40.6 million, while the Mini Ethereum Trust saw inflows of $3.1 million.

ETH Technical Analysis: Ethereum could see further decline if it fails to recover the key support level

Ethereum is trading around $2,390 on Thursday, down more than 2% on the day. Over the past 24 hours, ETH has seen liquidations of $14.74 million, with long and short liquidations accounting for $11.09 million and $3.65 million, respectively.

ETH broke above the support level around $2,400 for a key rectangle for the second time in the last three days. ETH traded inside this rectangle for over three weeks in August before moving out of it on Tuesday.

ETH/USDT 4 Hour Chart

If ETH fails to recover the $2,400 support quickly, its price could fall towards the $2,111 support level. This aligns with a key trend that suggests ETH is likely to break down to support around $2,111 before staging a rally.

The Relative Strength Index (RSI) is below the median line but is trying to move above its moving average. If it completes this move, ETH could see a brief rally.

In the short term, ETH could rise to $2,425 to liquidate over $45 million worth of positions.