Ethereum could rally above $7,000, leads overvalued Solana on key valuation metrics: Standard Chartered
|- Ethereum leads ‘overvalued’ Solana in several key metrics, according to Standard Chartered analysts.
- The bank noted that Ethereum could rally to $7,000 under a Harris administration and $10,000 under Trump.
- Ethereum bounced off the support level near $2,400 as it attempts to tackle the $2,490 resistance.
Ethereum (ETH) price traded within the $2,300 to $2,350 range on Tuesday following a report by Standard Chartered Bank, which noted that the number one altcoin is ahead of Solana in several key valuation metrics.
Ethereum vs Solana: Valuation metrics
In a recent report, Standard Chartered analysts led by Geoff Kendrick noted that Solana is overvalued compared to Ethereum due to several novel valuation metrics:
- Ethereum's market capitalization versus network fee revenue ratio is 121, over 2x less than SOL's 250.
- Ethereum hosts 38% of the blockchain industry developer's pool, while Solana houses only 9%.
- Solana's annual supply growth rate is 5.5%, while Ethereum's inflation rate only recently turned positive at 0.5%. This implies that ETH's staking yield is 2.3% more than SOL's 1%.
Kendrick added that SOL's price, when compared against its valuation metrics, indicates "the market is pricing in a very bright growth future for Solana." The analysts wrote that SOL will outperform ETH and Bitcoin if Donald Trump is elected as the next US president. Conversely, if Kamala Harris emerges as the victor, SOL will trail the top two cryptos by market capitalization.
Additionally, the bank lowered its 2025 year-end ETH forecast, predicting the top altcoin to see a new all-time high of $7,000 under a Harris administration and $10,000 under Trump. This is almost 50% lower than its previous prediction of ETH reaching $14,000 by the end of 2025.
Meanwhile, Ethereum ETFs recorded neutral net flows on Monday, with the nine issuers recording zero flows, per Farside Investors data. This marks the second time the products have posted zero flows since launch. The first time was on August 30, when all issuers recorded zero flows.
Ethereum bounces off key support level as it attempts move toward $2,490 resistance
Ethereum trades around $2,430 on Tuesday, following $18.93 million liquidations in its derivatives market — with long and short liquidations accounting for $10.89 million and $8.04 million, respectively, per Coinglass data.
ETH bounced off a support near the $2,400 psychological level and is attempting to move toward a rectangle resistance at $2,490. However, it has to clear a barrier near the convergence of the 50-day and 100-day Simple Moving Averages (SMA). A successful move above the $2,490 resistance could send ETH toward $2,596.
ETH/USDT 4-hour chart
The Relative Strength Index (RSI) and Awesome Oscillator (AO) momentum indicators are slightly above their neutral levels, with the latter posting decreasing red bars. This indicates both bearish and bullish momentum is almost equal in the market.
A daily candlestick close below $2,395 will invalidate the thesis.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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