The current bull market has seen top alternative cryptocurrencies, except Ethereum, shine, and now, ETH holders are becoming frustrated. Market sentiment signals extreme negativity among the Ethereum community, and the crypto project’s slumping market cap growth is not helping matters.

Compared to other assets like Ripple (XRP) and Solana (SOL), whose market capitalizations have grown by 36.9% and 32.2% in the past month, ETH has been struggling and even recorded a 4.7% decline.

Factors Driving ETH Underperformance

A new report by the market intelligence platform Santiment analyzed factors driving Ethereum’s underperformance.

According to the analysis, the crypto community has been criticizing Buterin for periodically selling off large amounts of ETH. Although the Ethereum co-founder has explained severally that those sales were executed to fund personal expenses or support projects related to the blockchain, community members see them as a sign that he may not be confident in the network’s future.

On several occasions, Buterin’s ETH sales have triggered multi-week-long sell-offs among traders amid heightened concerns about Ethereum’s future and decentralization. Some market participants insist that Buterin, a few big players, and the Ethereum Foundation have too much control over the network because of their large ETH holdings.

These players include Coinbase, Binance, and Lido Finance, and their influence has raised centralization concerns among users. Additionally, users are worried about Ethereum following government rules in some cases, such as blocking transactions to the crypto mixer Tornado Cash.

A Good Sign?

From a more technological perspective, some analysts believe Ethereum’s underperformance could also be linked to its decision to go modular. Modularization in this context refers to Ethereum splitting its responsibilities across smaller, specialized projects called layer-2 solutions.

While going modular could have a positive impact on Ethereum in the long term, ETH is struggling currently because these layer-2 solutions are taking away some of the attention and investment that used to go to the cryptocurrency. One illustration of this issue is the ETH supply spiking significantly after the Dencun upgrade because transaction fees declined, and less ETH got burned.

Regardless of these factors, Santiment believes that the extremely negative social side of Ethereum is a good sign for the short-term future of ETH because the market often moves in the opposite direction from general investor sentiment. So, ETH could finally break past the $4,000 range in the coming weeks if retail traders remain bearish and sell off their coins to long-term holders and key stakeholders out of frustration.