It is clear that the crypto world is not living its best moment due to the bad news that has occurred throughout this past year and also succumbed to the global economic crisis that we are experiencing. However, since the start of 2023, it seems that the global cryptomarket is living a “recovery moment” and has accumulated several cumulative green days.

One of the coins that experimented a huge increase in price has been ETH. It started below $1200 and is currently at $1550, increasing around 30% of its inital year price. Why ETH price has been going up during this period?

In general, it seems that Bitcoin and other altcoins are also experiencing similar behaviors. But… have the other coins registered similar increase to Ethereum? Why?

The intention of this dashboard is to try to assess why ETH price has been growing over the past days as well as find several network behavior that helps us to detect the main cause of this behavior.

To answer this, we are gonna explore several metrics not only in general perspective but also in a more specific way. Mainly, 3 different approaches have been carried out.

In the first one, we will try to compare ETH price evolution against other major cryptocurrencies including BTC in order to track if ETH price exerpimented several behavior than the rest of the market. To do so, I have compared several metrics between ETH and BTC as well as the major altcoins (chosen as average crypto market) like BNB, MATIC and OP. The metrics studied have been:

• Prices trends over the past year
• Daily changes over the past year
• Relationship between ETH changes and cryptomarket changes

The second apporach is about to find and explore several Ethereum activity metrics that could be correlated to its price and thus, may be the cause of the fluctuation. In this case, the metrics to be evaluated are:

• Some causes for cryptomarket struggle such as increase in transactions, new users coming to the network, more volume coming or exiting the chain, etc.
• Study of any potential causes or any indicators that could help us predict why its happening.

The third and final approach is about to explore the Ethereum ecosystem activity in a dive deep. The idea is to see which sectors and dapps have been the most active ones over this time and could be the main cause of the ETH price increment. The metrics here are:

• Evolution of users
• Evolution of transactions
• Number of users by main destination
• Number of transactions by main destination
• Number of users by sector
• Number of transactions by sector

Because of there are an important amount of bridges in terms of transactions, we have explored as well the main activity did by users just after bridging in order to understand their behavior.

Behavior activity by sector

Behavior activity by destination

Extra Approach: Post bridging behavior activity (Hop Protocol)

In this section, we are gonna try to explore which type sectors have been the most active or the most used during this period to see if there are some of them causing the price fluctuation.

In these charts, we can see the most common sectors in terms of transactions and users. The most relevant think is how again, the Layer2 sector has been the most common one over the major of the days. Makes sense taking into account that in terms of destination, Hop Protocol has been the most common one. However, Looking in both, number of transactions and total active users, the top sector has been the CEXes. In this case, the CEXes have been similar numbers to Layer2 sector but there were two specific days where the amount of transactions and active users there spiked, in concrete the January 5th and 9th. However, it is not related with any spike in the ETH price.

Overview

Methods

Approach #1: ETH price evolution against others

1. Ethereum swaps

3. User activity on Ethereum

As a result, here we can see the difference between BTC price performance and ETH price performance from January 1st to January 16th. It can be seen how the ETH and BTC prices followed similar trends. However, it seems that when BTC goes up, ETH do it in a higher range. On the other hand, when BTC goes down, ETH do it in lower ranges.

If we take a look at the second image, we can see how there is a strong positive correlation between the ETH price and the average cryptomarket price in terms of daily changes. It can be clearly seen that when the percentage is positive, the average market change is positive as well.

To conclude this first approach, I have compared the evolution of ETH price against the whole cryptomarket in order to see if it follows similar trends or at some points the cryptomarket price developed different sideways. In the first two images, we can see the ETH price changes over the past days in comparison to the other top crypto tokens such as BNB, OP and MATIC. As it can be seen, when the ETH price goes up or down, the whole cryptomarket price do the same but in a more pronounced manner. It is a clear positive correlation between the price change of the whole cryptomarket and the ETH price.

The first possible indicator selected are the netflow 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 accross Ethereum has been negative on all of the days since 2023. If we take this trend and compare it against the ETH price change, we can see how they are negatively correlated due to follows contrary trends. It can be seen how when the volume increase negatively (more outs than ins) the price tends to increase faster. In contrary, when the netflow is close to 0, the price tends to not move.

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 indicator.

If we take a look at the first chart, it can be seen how the volume of tokens in transfers has fluctuated a lot over the past days, showing a significant uptrend, reaching the highest numbers on January 14th coinciding with the highest ETH value.

Looking at the relationship between volume transferred and price movements, we can see a strong positive correlation, saying as that when the volume transferred is positively higher, the pricce movements seems to go up faster, and on the other way around.

Approach #2: Ethereum activity metrics that could be the cause of ETH price movements

2. Ethereum transfers volume

The third possible indicator selected is the users activity both news and actives. When the price of an asset change, it is commonly realted to mass adoption and it is to say, the amount of users interested on it. For this reason, I have selected this indicator.

If we take a look at the first chart, it can be seen how the number of active users has increased during the first week of January but remained steady during the second week. However, in terms of new users, it seems that the uptrend has been during a little bit more.

Looking at the relationship between active and new users and price movements, we can see a moderate correlation in both cases due to both show similar charts, saying as that when the user activity increase, there is a small positive impact on the price.

Approach #3: Finding dapps and sectors that may be causing the surge of ETH price

In this final extra approach, I have evaluated the user behavior just after the Hop Protocol bridge from Ethereum to Polygon because of has been the most common destination of Ethereum users since 2023.

Regarding the results, we can see how in the major of the cases, the first usage of bridgers has been with WETH token, mainly to switch them for others or to use it for some protocol action. Metamask and Opensea has been also in the top 3 most common uses after bridging. In this case, the most common sector have been dapps.

Conclusions

Key insights

• It can be seen how the average cryptomarket and ETH price followed similar trends but in different price change ranges.
• There is a strong positive correlation between the whole cryptomarket price and the ETH cryptomarket price in terms of daily changes. It can be clearly seen that when the percentage is positive, the average market change is positive as well**.**
• The netflow of swaps accross the major chain has been negative on all of the days since 2023. If we take this trend and compare it against the ETH price change, we can see how they are negatively correlated due to follows contrary trends, suggesting that a negative increase of volume of swaps on Ethereum ecosystem could lead to a price recovery.
• The volume of tokens transferred shows a significant uptrend, reaching the highest numbers on January 14th coinciding with the highest ETH value. Looking at the relationship between volume transferred and price movements, we can see a strong positive correlation, saying as that when the volume transferred is positively higher, the pricce movements seems to go up faster, and on the other way around.
• The number of active users has increased during the first week of January but remained steady during the second week. However, in terms of new users, it seems that the uptrend has been during a little bit more. There is a moderate correlation in both cases due to both show similar charts, saying as that when the user activity increase, there is a small positive impact on the price.
• During this period of time, more than a half milion of users used Hop Protocol, being the top destination. The first usage of bridgers has been with WETH token, mainly to switch them for others or to use it for some protocol action. Metamask and Opensea has been also in the top 3 most common uses after bridging.
• The most common sectors in terms of transactions and users have been CEX and Layer2. In this case, the CEXes have been similar numbers to Layer2 sector but there were two specific days where the amount of transactions and active users there spiked, in concrete the January 5th and 9th. However, it is not related with any spike in the ETH price.

In this section, we are gonna try to explore whcih type of dapps have been the most active or the most used during this period to see if there are some of them causing the price fluctuation.

In these first charts, we can see the most common destinations in terms of transactions and users. The most relevant think is the huge difference between the top destination chosen by users and the rest of them. While during this period of time more than a half milion of users used Hop Protocol, the second more used app has been some CEX with less than 350k transactions. If we take a look at the daily chart, it can be seen how in the major of the days, Hop protocol has been the top destination.

Due to this important behavior, the last approach will be to analyze the Hop protocol acitivty bridge.