Everton are set to take on Crystal Palace later this evening.
Palace have struggled in 2016 so far, but they did pick up a victory in their latest outing against Norwich City.
And Nicholas believes that win should inspire them to kick on, with Everton likely to be distracted by the FA Cup.
"Well, we're obviously well aware of the Everton situation and Roberto Martinez can't hide from the fact that this gifted team are underachieving," the Sky Sports pundit said.
"This club has to focus everything on the FA Cup semi-final, although the fans' demands mean Martinez can't take his foot off the gas in the league unless he doesn't mind seeing more banners.
"Palace got their win at the weekend which means they can relax again and I think, with Everton focusing on the cup, they will win again."
Everton cannot afford to be distracted by the FA Cup, as the pressure is progressively rising on manager Roberto Martinez.
The Spaniard is fighting against growing calls for him to be sacked, with the Toffees struggling to live up to expectations.
Everton are currently in 14th place, and they will be leapfrogged by Alan Pardew’s side if they do lose this evening.
If Palace can pick up the victory, they will move 13 points clear of safety, and surely seal their top flight status for another season.