Yes, your Best 14 players Q average, can be compared with the worst Team of those levels.
Most of those Team are abandoned or have lower quality players.

I am level 5 and i am competing in a level 7 cup, last season was on a level 6, i beat 2 Team from level 5, but was eliminated by a Team from my level, so it is normal.

The Best thing is that you earn more money.