Overview

The price of Avalanche has increased since the start of the year after a large crypto winter. However, it seems that there is some reason why Avalanche price has increased during the recent days due to BTC hodlers have been moving holdings to the Avalanche chain.

So, after a bad 2022 year for crypto with horrible news such as LUNA crash as well as the FTX events, it seems that the market is recovering fast and Avalanche is one of the tokens experimenting a major growth reaching more than 100% of increase in price since January.

Methodology

For this reason, we are gonna explore now how has been the price evolution of Ethereum and we will compare it against other cryptocurrencies. As well, we Avalanche and how BTC holders moving to Avalanche chain has impacted on it and to the whole Avalanche chain ecosystem activity. The idea is also to try to find some pattern that could be related to the movement of the price.

To do that, I have compared several metrics between AVAX and its competitors like BTC, ETH, BNB and MATIC. The metrics studied have been:

• Prices trends over the past month
• Daily changes over the past month
• BTC transfers to Avalanche chain
• Relationship between AVAX changes and cryptomarket changes
• Study of Avalanche chain activity

Avalanche price vs others

As seen, from the beginning of the 2022, a total of 139 times the average market up more than 1%. Take into account that we have considered cryptomarket as average metrics of BTC, ETH, BNB, and MATIC tokens because in my opinion they are representative tokens. During these good days when market up, the average changed in prices were 3.5%. However, in the case of AVAX price, the average percentage change during those days were 3.1%. In fact, if we take into account how many times AVAX price increased when cryptomarket increase more than 1% were 98. Then, in only 30 times when the cryptomarket goes up more than 1%, AVAX price stayed below.

Finally, I have computed how many times AVAX price outperformed the cryptomarket when it went up. From the 139 times, 56 days AVAX price outperformed cryptomarket, being 40% of times when AVAX price had a better performance than the whole cryptomarket.

To conclude this first approach, I have compared the evolution of AVAX price against the whole cryptomarket in order to see if it follows similar trends or at some points the AVAX price developed different sideways. In the first image, we can see the AVAX price changes over the past month in comparison to the other top crypto tokens such as BTC, BNB and MATIC, catalogued as "average crypto market". As it can be seen, when the BTC goes up or down, the other altcoins do the same but in a more pronounced manner. It seems that AVAX is not as volatile as the other tokens, but the trend is the same as the rest.

In fact, if we take a look at the second image, we can see how there is a strong positive correlation between the AVAX price and the average cryptomarket price in terms of daily changes (considering BTC). It can be clearly seen that when the percentage is negative, the average market change is negative as well. On the other hand, when the AVAX price change is positive the average whole cryptomarket goes up as well. In both cases, when the percentage is higher, the same occurs for the whole cryptomarket.

AVAX swapping activity change and price relationship

To assess is AVAX price will continue going up, a possible indicator selected is the swaps. When the price of an asset change, it is the major of the times related to its netflow on swaps. For this reason, I have selected this first indicator.

If we take a look at the first chart, it can be seen how the netflow of swaps for AVAX has been so steady over the past days and weeks, reaching the highest numbers between 12nd and 13th of February, when the major of BTC transfer activity were concetrated. If we take this trend and compare it against the AVAX price, we can see how they are a little bit correlated but its not significant.

AVAX transfer’s activity and price relationship

The second possible indicator selected is the transfers. When the price of an asset change, it is commonly realted to transfers activity. For this reason, I have selected this first indicator.

If we take a look at the first chart, it can be seen how the volume of AVAX in transfers has fluctuates a lot over the past days and weeks, reaching the highest numbers on February 2nd, the same day when the highest number of BTC transfers was registered. If we take this trend and compare it against the AVAX price, we can see how they are positively correlated due to follows similar trends.

Looking at the relationship between volume transferred and price movements, we can see a moderate/strong negative correlation, saying as that when the volume transferred is higher, the AVAX price seems to go up.

Key insights

• The difference between BTC price performance and AVAX price performance over the past year. It can be seen how the AVAX and BTC prices followed similar trends. However, it seems that when the BTC prices drops heavly, the drop of the AVAX price tend to be higher.
• A total of 139 times the average market up more than 1%. Take into account that we have considered cryptomarket as average metrics of BTC, ETH, BNB, and MATIC tokens because in my opinion they are representative tokens.
• During these good days when market up, the average changed in prices were 3.5%. However, in the case of AVAX price, the average percentage change during those days were 3.1%. In fact, if we take into account how many times AVAX price increased when cryptomarket increase more than 1% were 98. Then, in only 30 times when the cryptomarket goes up more than 1%, AVAX price stayed below.
• From the 139 times, 56 days AVAX price outperformed cryptomarket, being 40% of times when AVAX price had a better performance than the whole cryptomarket.
• The AVAX price changes over the past month in comparison to the other top crypto tokens such as BTC, BNB and MATIC, catalogued as "average crypto market". As it can be seen, when the BTC goes up or down, the other altcoins do the same but in a more pronounced manner. It seems that AVAX is not as volatile as the other tokens, but the trend is the same as the rest.
• The volume since to be increased over the past month, reaching an ATH on February 2nd with over 4.5k transfers in a single day. As well, the number of BTC holders transferring to Avalanche has been increasing over that period, reaching the highest value on February 15th with over 580 single holders.
• The netflow of swaps for AVAX has been so steady over the past days and weeks, reaching the highest numbers between 12nd and 13th of February, when the major of BTC transfer activity were concetrated. If we take this trend and compare it against the AVAX price, we can see how they are a little bit correlated but its not significant.
• We can see a moderate/strong negative correlation between AVAX volume transferred and AVAX rpice, saying as that when the volume transferred is higher, the AVAX price seems to go up.

As a result, here we can see the difference between BTC price performance and AVAX price performance over the past year. It can be seen how the AVAX and BTC prices followed similar trends. However, it seems that when the BTC prices drops heavly, the drop of the AVAX price tend to be higher.

The second and third chart represents the daily change in price of AVAX price against BTC price. When BTC decreases the AVAX prices decreased in a higher % and on the other way around.

BTC transfers to Avalanche

Looking at the evolution of BTC transfers to Avalanche Chain, it can be seen how the volume since to be increased over the past month, reaching an ATH on February 2nd with over 4.5k transfers in a single day. As well, the number of BTC holders transferring to Avalanche has been increasing over that period, reaching the highest value on February 15th with over 580 single holders. As it can be seen in the second image of this section, it seems that there is a correlation between AVAX price evolution and the number/increase of BTC holders transferring tokens to Avalanche.

In the final two images, it can be seen an increase as well on the volume of BTC transferred to Avalanche over the past month. However, the correlation with the price is not consolidated at all. In fact, the last image shows a negative correlation.