What is the Question?🚨

The price of Ethereum has sank in recent days - how does it compare to other tokens amid a general market downturn?

Can you find evidence of any potential causes for ETH's struggle? Are there any other indicators that could help us predict whether/when it could recover?

Analyzed Topics:

1. ETH and Other Tokens Price Dropdown Since November 1st 2022
2. ETH Buying or Selling Pressure
3. ETH Transfers
4. ETH Swaps

Introduction🚩

What is FTX?

FTX is a Bahamian cryptocurrency exchange. FTX is incorporated in Antigua and Barbuda and headquartered in The Bahamas. As of February 2022, the exchange has over one million users. FTX operates FTX.US, a separate exchange available to US residents.

What is Ethereum?

Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network that securely executes and verifies application code, called smart contracts. Smart contracts allow participants to transact with each other without a trusted central authority.

It is also a technology for building apps and organizations, holding assets, transacting and communicating without being controlled by a central authority. There is no need to hand over all your personal details to use Ethereum - you keep control of your own data and what is being shared. Ethereum has its own cryptocurrency, Ether, which is used to pay for certain activities on the Ethereum network.

Method⚡

In this dashboard, i explored the reasons of November market downturn especially ethereum price dropdown and compared ethereum price to other tokens price especially ethereum based tokens. Then i analyzed ethereum buying and selling pressure and its transfers and swaps in the next steps. I analyzed these whole metrics since the beginning of ==November 2022== and also i took a look at FTX’s collapse that happened on early November too.

I used ==“crosschain.core.fact_hourly_prices”== and ==“crosschain.core.dim_asset_metadata”== to extract token prices and compare them to each other. Then used ==“ethereum.core.ez_eth_transfers”== for ethereum transfer data and ==“ethereum.core.ez_dex_swaps”== for ethereum swap data. I used these tables from ==Ethereum.core== and ==crosschain.core== databases provided by Flipsidecrypto.

This dashboard made on ==2022-11-24==

Findings👀

• In this section, i showed ETH price correlation with other tokens price especially ethereum based tokens since the beginning of November to see which tokens dropped the most.
• As we see, after FTX’s mess that happened on early november, put some huge effects on the whole market and tokens price dropped significantly especially the ones which were accounting most of alameda and FTX wallets like SOLANA.
• As we see, SOL token dropped almost 56% from 32.7$ to 14.33$ in past 24 days since Nov 1st and was the biggest loser in the whole crypto market.
• In this bloody November, unlike most tokens LTC was bullish and its price increased like 40% in past 3 weeks.
• In ethereum based tokens, we see that CRV was the biggest loser with almost 30% drop on November 21th followed by AAVE with almost 20% drop, the ETH itself dropped over 20% after FTX’s crisis.

1. ETH and Other Tokens Price Dropdown Since November 1st 2022

What Happened to FTX?

Alameda specialized in big bets on crypto companies. To finance those bets, SBF courted investors with promises of high returns and zero risk, which sounds dumb in retrospect but plenty of rich people believed it at the time. FTX was, until recently, the world’s fifth-largest exchange. It had its own token, FTT, which functioned like a loyalty program for customers, giving them perks like discounted transaction fees. But FTT was also bought and sold like a normal token, once trading for as much as $80. (Today, it’s around $1.50.) FTX minted tons of this highly valuable yet extremely imaginary money—there are currently about 300 million FTT tokens in circulation—and reportedly used it as collateral to take out loans for Alameda. This was dangerous because if the price of FTT fell below a certain level, it would leave Alameda unable to pay back its lenders. (When the entire crypto market slumped earlier this year, people were mystified to see FTX bail out several failing companies. SBF may have been trying to prevent those companies from selling their FTT at a discount.)

In early November, CoinDesk reported that two-fifths of Alameda’s $14.6 billion balance sheet was held in FTT, sparking panic among FTX customers, who were aware that problems at Alameda could mean problems for the exchange. Changpeng Zhao (a.k.a. CZ), the CEO of rival exchange Binance, dumped 23 million FTT, sending its price into free fall. Twisting the knife, CZ announced a tentative deal to buy FTX, then abandoned it after finding too many holes in the company’s finances. One reason for those holes, according to Reuters: SBF had created a secret backdoor in FTX’s bookkeeping system that allowed him to move depositors’ money off the exchange to Alameda without alerting customers or most of his own employees. Oh, and another plot twist: Turns out SBF had given himself a $1 billion personal loan out of Alameda’s coffers.

More Info

2. ETH Buying or Selling Pressure

3. ETH Transfers

Findings👀

• With the selling pressure that ethereum experienced in November the most, we see that most of this pressure were on the days that FTX collapsed and users started to sell their assets mostly their ETH on Nov 8th,9th and especially 10th.
• After that days, the selling pressure dropped dramatically but still it was more than buying pressure, we can conclude from this data that November was a bearish and selling month for ethereum or for the whole crypto market.
• Over 55B worth of ethereum sold in just 3 days: November 8,9,10.
• Panic sell is a common thing in crypto trading and the massive selling pressure that happened on those 3 days that i mentioned was because users got afraid from FTX news and its possible bankruptcy, so they sold their assets especially their eth as quick as possible. Even the market downturn was because of that.

Findings👀

• Here, i attempted to show eth transfers to where and which platforms since the beginning of November.
• As we expect, most of the eth transfers in terms of eth and usd volume happened on November 8th, 9th and especially 10th.
• As we look more precisely, most amount of eth sent to CEXs and DEXs on those 3 days, but it has sent to CEXs more than DEXs. Nearly over 11M worth of eth tokens sent to CEXs and almost 8M worth of eth tokens sent to DEXs in those 3 days.
• I showed ETH destinations by CEXs/DEXs, in these charts we see that Binance, the biggest crypto exchange was the biggest receiver of ETH among CEXs and Uniswap was the biggest eth receiver among DEXs on days around FTX crisis.
• CEXs experienced the highest amount of eth inflows on Nov 9th with 850K and highest amount of outflows on Nov 10th with over 1M. Also the highest number of eth netflow happened on November 10th too with -452K worth of eth tokens.

4. ETH Swaps

Findings👀

• In this section that shows the swapping activity of ethereum since november 1st, again we see that most of the eth swap activity happened on those famous 3 days, Nov 8th,9th and 10th.
• The highest swap activity happened on Nov 9th with over 165K number of swaps that recorded by almost 1.8K swappers with apprroximately 21B USD volume. Although November 9th had the higehst number of swaps and swappers, but the highest amount of USD swap volume happened on November 10th with over 28B dollars in total.
• Over 85% of swap volume was Swap FROM ETH over time since the beginning of November.

Conclusion💡

• The reason of crypto market downturn was FTX’s collapse that happened on November 7th, after that collapse, tokens price experienced a huge drop especially ethereum based tokens, CRV was the biggest loser between ethereum based tokens.
• SOL recorded the highest price dropdown with over 55% dropdown percentage.
• Most of the eth selling pressure, transfers, swaps and everything happened on the days around FTX’s collapse especially November 10th.
• Binance, the biggest crypto exchange was the biggest receiver of ETH among CEXs and Uniswap was the biggest eth receiver among DEXs on days around FTX crisis.
• Users sent most of their ethereum to CEXs and DEXs among other sectors in this bloody November.

Author: Sbhn_NP

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Thanks for your time!