Spot the difference edition.

Intro

Bitcoin is by far the most widespread blockchain, it would be hard to find anyone who hasn’t yet heard of it. How do Algorand’s price relates to it?

• Is the price of Algorand more closely correlated with the crypto market, and assets such as BTC or ETH, or is it more correlated with network usage such as number of transactions or ALGO transfers?
• How does this compare to other networks such as Solana? Note your findings and anything else that may be interesting in relation to Algorand's price movement!

Method

All the data will be retrieved from Flipside’s data repository.

• Prices will be retrieved from the next tables:
  • WETH: ethereum.core.fact_hourly_token_prices
  • WBTC: ethereum.core.fact_hourly_token_prices
  • ALGO: flipside_prod_db.algorand.prices_swap
  • WSOL: solana.core.fact_swaps
    • with solana.core.dim_labels for labeling.
• For ALGO transfers volume and activity:
  • flipside_prod_db.algorand.transfers
• For ALGO application calls:
  • flipside_prod_db.algorand.application_call_transaction

Is the price correlated?

Yes, i mean, just look at it.

When looked at it, the price movements across all four blockchains do share a lot of similarities.

• For example at that first peak, in May 4 at 19:00. All blockchains saw an uptrend in value.

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• For a soon to be falling down in price that lasted till May 12 at 05:00 while for Solana was at 07:00, the same as Algorand.

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• The moves like peaks and lows are followed across all chains.

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• Movements appear to be directed by Bitcoin, but not holded by its price.

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• For example, Bitcoin’s price fall could come to a stop, and the other blockchains might not start holding its prices, and continue a slow trend that follows what could be called “pulses” in Bitcoin’s price.

• Those pulses dictate movements inside the price trends, for example while in a downtrend, if there is a surge in BTC’s price, it will be shared across the blockchains, while maintaining a a baseline trend.

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But what about Algorand internal activity ?

Well, its hard to say.

• There is an increase in activity while reaching important movements, like bottoms or highs.
• Applications calls do increase but the token being registered by the hour, it needs a microscopic timestamp to see what comes first, the price falling and activity rising during price bounces or the increase in activity stopping the fall in price.
• If only Solana’s prices didnt follow the same pattern.
• So increase in activity and performance appears to be related to the price, and not the other way.

That close?

• Yes.

• Price trends don’t necessarily follow increases in activity’s level.

• One thing that is possibly happening is pressure, for buy or sell order created by bots following BTC’s price movements.

• Given that the whole industry recognizes BTC’s presence as an indicator of cryptohealth, it makes sense that its trends facilitates other blockchains price movements.

• If the price has room for movement according previous price supports and resistances, it will follow btc’s trend.