> Q109. 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?

In this dashboard, we examine the price of ALGO and SOL and examine whether the price of these two currencies is correlated with the crypto market and the price of assets such as ETH, or more correlated with their own network activities such as number of transactions or volume of transactions.

This analysis consists of two parts. The first part includes comparing the price of ALGO and SOL with ETH separately and the second part includes the effect of ALGORAND blockchain activities on ALGO price and the effect of SOLANA blockchain activities on SOL price.

Note: All data have been reviewed in the last 60 days.

Let's Start With ALGO

In the charts below, all the orange lines indicate the price of ALGO. The first chart is the comparison between the price of ALGO and the price of ETH (blue line). In the chart ETH Price vs. ALGO Price has a pattern similar to the ETH price pattern on other days except May 8, when the so-called ALGO price is pumped. The reason for the ALGO price pump is that on this date FIFA have announced an agreement with Algorand in which they will become "the official blockchain platform of FIFA and provide the official blockchain-supported wallet solution" and an official sponsor of the 2023 FIFAWWC. Take a look at this tweet.

Along with the similar pattern of ALGO prices with ETH prices, on some days, such as May 11 and 12, we see that the ALGO price failure ratio is much higher than the decrease in ETH prices. In addition to the drop in the price of ETH, another reason that could cause this failure is that on 11 and 12 May a very large volume of ALGO (approximately 22M on 11 May and 20M on 12 May) was swapped to other tokens. This could further upset the ALGO price balance, causing a sharp drop in price from around 0.73USD to around 0.4USD.

In recent days, we see that the price increase ratio of ALGO is higher than ETH. This could be due to the reduced ALGO swap volume to other tokens. This means that less ALGO is released and this can prevent price fluctuations.

In the charts below, the orange line indicates the SOL price. As in the chart ETH Price vs. SOL Price It is clear, on most days the SOL price has changed in line with the ETH price. This means that the price of ETH has had a direct impact on the price of SOL. But do the activities in SOLANS also have an impact or not?

As we can see, the ups and downs of the SOL price are in line with the ETH price. But in certain cases the ratio of price changes in SOL is greater than changes in ETH. This indicates that another factor has contributed to SOL's price changes. For example, on May 11 and 12, the percentage of price changes in SOL is slightly different. If we look at the chart SOL price vs Swap From SOL, we see that in these two days, a large amount of SOL has been swaped to other tokens. There has also been a large jump in the volume of SOL transactions in these two days. This has led to a further drop in the price of SOL. The opposite has happened in recent days. That is, the SOL price increase is greater than the ETH price increase. We see that since June 21, the volume of swapped SOLs to other tokens has decreased. In the same days, the price increase of SOL has been higher.

How About SOL?

Conclusion

From the above results and charts, it can be inferred that the price of ALGO and SOL is directly affected by the price of ETH. But this is not the only factor. Other factors such as the volume of transactions as well as the volume of swapped ALGO and SOL also have a great impact on determining the price of ALGO and SOL. Therefore, it can be said that both the price of ETH and the activities performed in ALGO and SOL determine the price of these two.