In this post, we will be looking into the Correlation on ALGO Price with the Crypto Market and also with the other currencies like ETH, BTC et., We will also analyze if there is any correlation with the Algorand Network USage (like Transaction counts etc.,) and compare with the other Networks like Solana, Flow etc.,

What is ALGO ?

Algorand is an open-source, decentralized blockchain network that leverages a two-tiered structure and a unique variation of the Proof-of-Stake (PoS) consensus mechanism to increase transaction speeds and achieve finality. Algorand’s block rewards are distributed to all ALGO coin holders, offering all ALGO holders an opportunity to earn rewards instead of just block producers.

ALGO Price

The supply of Algorand’s native cryptocurrency, ALGO, is capped at 10 billion tokens, created at the time Algorand Launch in 2019. Many of those coins are locked up and have yet to be distributed.

ALGO’s price started at $2.19 when it launched in Jun 2019, but the price quickly dropped to as low as $0.19 in August 2019, according to market data provider CoinMarketCap. As the crypto market picked up again in 2020, ALGO’s price surged, reaching a peak of $1.71 in February 2020. ALGO’s price hit its all-time high of $2.37 in June 2021.

In the below 6 graphs, we can see what’s the

• Current Price of ALGO, BTC & ETH
• Price Trends over Time for ALGO, BTC & ETH

From these graphs, if we observe the Price Trends, we can say that BTC and ETH are exactly correlated. Even though Algo is not fully correlated with the BTC or ETH, we can see that ALGO Price trend is almost correlated (90%) with the BTC and ETH.

Let’s compare the ALGO price with the Cryptomarket and the Network usage in the next sections.

ALGO Price correlation with Algorand Network Usage

The below graph provides us the Algorand Network Usage (includes all transaction types trends).

We can see that the ALGO Price is very less correlated with the Network usage. There is slight decrease in the transactions count, but ALGO price is declining more comparing to the transactions trends.

May be we can say that the transactions are consistent, but the transaction volume is declining. Hence we see that the ALGO price is also decreasing.

ALGO Price correlation with Crypto Market

We can observe the total Crypto Market trend in the below graph from Oct’21. By comparing the entire crypto market trend with the ALGO Price trend, we see that the ALGO price is almost correlated with crypto market except in the December and January months. We see that there is high decline in the ALGO Price in Dec and Jan months compared to the crypto market.

we can conclude that the ALGO Price is mostly correlated with the Crypto Market and also the other Assets like ETH & BTC.

Comparing with other Network’s Usage

The below 3 graphs provides us the Price and Network Usage of Solana, FLOW and Osmosis.

By comparing these with the ALGO trends, we can clearly say that ALGO is again 90% correlated with SOL but not correlated with FLOW and OSMO. Even the Network Usage, it is 99% same for both FLOW and OSMO. But it is different than the Algorand.

Summary

From all the above trends, we can summarize the following points:

• The overall Crypto Market is declining slowly from Dec 2021. And it is same with the ALGO. But the ALGO price declined more from December and increased in February, 2022. But again it is slowing declining and it is continuing.
• Anyway, we can easily conclude that the ALGO Price is almost correlated with the Crypto Market and even the other major assets like BTC & ETH.
• Coming to the ALGO Price correlation with its Network Usage, we can clearly say that there is not much decrease trend in the transactions count compared to price.
• Comparing with the other networks, we see that FLOW and OSMO price and networks are correlated, but ALGO doesn’t correlate with those networks. But again the ALGO price is 90% correlated with the SOL price.