Ethereum tipped to reach $7,000, beats 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.
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.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Its native currency Ether (ETH), is the second-largest cryptocurrency and number one altcoin by market capitalization. The Ethereum network is tailored for building crypto solutions like decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), etc.
Ethereum is a public decentralized blockchain technology, where developers can build and deploy applications that function without the need for a central authority. To make this easier, the network leverages the Solidity programming language and Ethereum virtual machine which helps developers create and launch applications with smart contract functionality.
Smart contracts are publicly verifiable codes that automates agreements between two or more parties. Basically, these codes self-execute encoded actions when predetermined conditions are met.
Staking is a process of earning yield on your idle crypto assets by locking them in a crypto protocol for a specified duration as a means of contributing to its security. Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism on September 15, 2022, in an event christened “The Merge.” The Merge was a key part of Ethereum's roadmap to achieve high-level scalability, decentralization and security while remaining sustainable. Unlike PoW, which requires the use of expensive hardware, PoS reduces the barrier of entry for validators by leveraging the use of crypto tokens as the core foundation of its consensus process.
Gas is the unit for measuring transaction fees that users pay for conducting transactions on Ethereum. During periods of network congestion, gas can be extremely high, causing validators to prioritize transactions based on their fees.
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