0. Introduction

There are many factors that can influence the price of an asset. These can be similar assets such as BTC, which is a representative of the overall cryptocurrency market sentiment but also follows the global market conditions; or ETH, which is the biggest Smart Contract platform token and its price not only follows that of BTC but also could be an indicator of the overall interest in Smart Contrat technology. Finally, intrinsic factors to the token ecosystem can also have an effect on the supply and demand of the token.

1. Methods

On this dashboard, we assess the correlation between the ALGO token price and different metrics. We also compare the SOL price to the equivalent metrics as somewhat of a control group. In particular, the metrics we look at are:

1. Asset Price vs. BTC Price in USD. We obtain the ALGO price from the swap prices in the Algorand tables. Prices of the rest of the assets have been extracted from the Ethereum token transfers table.

2. Asset Price vs. ETH Price in USD

3. Asset Price vs. Asset Chain Number of Transactions

4. Asset Price vs. Asset Transfer Volume

2. Analysis

2.1 BTC Price

Both assets seem to follow the price of BTC, only in two different ways. On the one hand, ALGO seems less volatile while still following the overall trend. In contrast, SOL seems to follow the BTC chart more closely, only falling harder when BTC falls and taking a bit longer to rally up.

2.2 ETH Price

We see similar behavior to the one we saw in the case of BTC. This is likely because ETH also follows the BTC chart to some degree.

2.3 Daily Transactions

In the case of ALGO, overall both the price and the number of transactions have steadily decreased over time. In May, likely because of the Algorand x FIFA partnership announcement, we see a significant increase in both transactions going on and price. In the case of Solana, until March the metrics are correlated, but since that point, they seem to be inversely correlated, such that when price increases transactions go down and the opposite happens when price decreases. These metrics may just not be related at all and likely strongly depend on other factors.

2.4 Tranfer Volume

In the case of ALGO, we see a delay of 4 to 8 days between increases in price and an increase in transfer volume. We see this behavior three times during 2022: in January, April, and May. In the case of Solana, we see an increase in SOL transfer volume when the price was lower, which could simply mean that USD volume remains steady and so the token volume increases.

3. Conclusion

• Both ALGO and SOL seem to follow the prices of BTC and ETH. While ALGO follows them on a more moderate manner, capturing the trend with less volatility, SOL seems to follow the price more accurately.

• In terms of the number of transactions, we don't see much correlation between that measure and the price of the tokens.

• The transfer volume seems to increase as the price goes down, which would indicate that it's the USD volume that is steady while the amount of tokens only follows.

Contact Data

Thank you for reading!

For any questions or feedback feel free to contact me on Discord at CarlOwOs#4288 or Twitter at @CarlOwOs1