Introduction

Ether (ETH) is the native token used by the Ethereum blockchain and network as a payment system for verifying transactions. In recent days, the price of the Ethereum token has faced a sharp drop in the financial markets. In this dashboard, we are going to examine the trend of Ethereum price changes in recent days and analyze the factors affecting its price reduction.

In order to better understand Ethereum price changes, we also make a comparison with Solana, Near and Flow tokens. The trend of price changes and moving averages of the price of these tokens are presented. Also, changes in the volume of token exchanges in recent days have been reviewed. The relative strength of the buyer to the seller as an important metric in the behavior of the token price, has been calculated and analyzed over time and we have also analyzed the important sellers of recent days.

Volume

The volume of transactions and exchanges is of particular importance in understanding the behavior of the token price. Price changes can be significant at the same time as the volume of transactions increases. The graphs below show the trading volume for Ethereum, Near, Flow and Solana over the last seven days. The three days associated with the drop in price, i.e. the period between November 20th and 22nd, are marked with different colors in these charts.

Relative Strength of Buyers to Sellers

The relative strength of buyers and sellers can be a good indicator of the activity of buyers and sellers. The higher ratio indicates the presence of stronger buyers and weaker sellers. And the smaller this number is, the stronger the presence of sellers. The value of this metric is obtained by dividing the number of sellers by the number of buyers in a certain period of time. The more sellers have sold a fixed amount of tokens to the fewer buyers, the higher the per capita purchase of each buyer. Buyers with higher purchase per capita are interpreted as more powerful buyers. In the following, we have plotted the relative strength of the buyer to the seller in Ethereum for a three-month period. We have also reported the average values ​​of this ratio during the last three months and its latest value.

Market Prices

In this section, we examine the price changes of Ethereum in recent days. First, we will introduce the important events of November, which led to the drop in the price of Ethereum and had a significant impact on the decrease in the digital currency market.

• FTX exchange crisis between 6th and 14th of November

  > FTX is a centralized exchange for digital currencies. The exchange was founded in 2019 and as of February 2022 had over one million users. FTX has become one of the largest exchanges with high turnover in this field during the three years of its existence. In the past days, there were rumors about the bankruptcy of this exchange. A sharp drop in the price of the token related to this exchange, namely FTT, confirmed these rumors, and then this exchange faced a sharp drop in the value of assets and liquidation, which led to the bankruptcy of this exchange.

• Price drop in three consecutive days from 20th to 22nd of November

We have drawn these events and their impact on Ethereum price changes in the chart below. This chart shows the price of Ethereum over the last two months and has marked the time frame for the above two events. Also, the seven-day moving average is drawn in this chart.

Key Findings

Most of the top sellers are exchanges. Among the top ten sellers, half of them belong to centralized exchanges, whose presence among the top buyers and sellers is a natural thing. But the presence of an address as the second best seller that has sold a total of 245,000 Ethereum tokens in this three-day period is not normal.

This address is related to the wallet that holds the amounts stolen from the FTX exchange. This wallet was marked after the massive hacking of the FTX exchange and the theft of its assets, and it holds part of the stolen tokens. The address of this wallet is 0x59abf3837fa962d6853b4cc0a19513aa031fd32b[RefF] and is known as FTX Accounts Drainer.

FTX announced that it had filed for voluntary Chapter 11 bankruptcy proceedings for FTX, FTX.US and Alameda. Chapter 11 bankruptcy allows businesses to restructure their debt and continue operations, unlike Chapter 7 bankruptcy, where assets are liquidated. FTX and FTX.US wallets were emptied on Friday evening in an apparent hack. More than $600 million was drained from the wallets, CoinDesk reported. [RefG] Some wallet addresses belonging to the hackers where the stolen tokens were stored were identified. These addresses are marked with an FTX Accounts Drainer tag on Etherscan and other similar websites.

Considering the high sales volume of Ethereum tokens in these three days by this wallet, it can be said that the heavy and extensive sale of this account has been one of the most important factors in the drop in the price of Ethereum in this period of time. Considering the importance of Ethereum in the digital currency market, the drop in the price of Ethereum can also affect other digital currencies and lead to a drop in their prices. Therefore, one of the important reasons for the price drop in the digital currency market is this event in this period of time.

Strong Sellers

In this section, we present the important sellers from the 20th to the 22nd of November. The list below shows all the seller's addresses in this range and their total sales. In this list, we have listed 50 addresses with the highest amount of sales. If these addresses belong to the exchange, the name of the exchange is displayed instead of the address.

The charts below show the price changes of other tokens in the digital currency market alongside Ethereum. These charts cover the last seven days to show the impact of the second event on the price drop.

We have drawn the relative strength of the buyer to the seller for other tokens in the period of the last month in the graphs below. Two important events of this month are also marked in these charts.

Key Findings

• The two recent mentioned events have caused the price of Ethereum to fall. After these two events, the price of Ethereum has traded below the seven-day moving average. In the last few days, due to the growth of the Ethereum price and its rise above the seven-day moving average, there is a possibility of a change in the trend.
• In November, after the FTX crisis, we were in a downward trend and we are still in this trend. If the difference between the two moving averages is in the positive range, it can be said that the trend of price changes has become upward in the short term.
• The price drop between November 20th and November 2nd is also evident in other tokens. In the continuation of this dashboard, we will look for possible events related to this price drop.

Key Findings

The volume of transactions in Ethereum and Solana (and a little in Flow) has increased significantly in the three days specified, which can indicate its importance. Considering the slight growth of the price after these three days, it can be said that this price range is valuable for the buyers and they have started to buy. With the increase in purchases, the volume of transactions has increased and has led to price growth in the coming days. Of course, this does not indicate the reason for the price drop, but it can be a reason for the increase in volume.

The average relative strength of buyer to seller as well as the value of this metric on the last trading day for all four tokens are compared in the graphs below.

Key Findings

After the FTX crisis, the value of the defined metric has fallen sharply and reached its lowest value on November 13th. After that, with the arrival of powerful buyers, this amount has also increased. In the second event, i.e. the time period of November 20th to 22nd, we have had a noticeable decrease in the metric value, which indicates the presence of powerful sellers in this time period. We will continue to look for these sellers.

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In the two graphs below, in order to better recognize the trend of price changes in the short term, we have used two 7-day and 14-day moving averages. The left graph plots both moving averages and the right graph shows the difference between these two moving averages over time. In general, when the faster moving average (7 days) is lower than the slower moving average (14 days), it means a downward trend, and on the contrary, it shows an upward trend.

References

[RefA] [RefB] [RefC] [RefD] [RefE] [RefF] [RefG]

Solana

Solana is a decentralized blockchain built to enable scalable, user-friendly apps for the world. It is a public blockchain platform. Solana is a Layer 1 blockchain designed to facilitate smart contracts and the creation of new decentralized applications (DApps). Its native cryptocurrency is SOL [RefD].

Near

NEAR Protocol is a decentralized application (dApp) platform and Ethereum competitor that focuses on developer and user-friendliness. Its native NEAR tokens are used to pay for transaction fees and storage on the Near crypto platform. NEAR is a Proof-of-Stake blockchain that uses sharding technology to achieve scalability [RefC].

Flow

Flow is a blockchain platform that originally was designed for gaming purposes, but has expanded since its launch in 2020. The flow blockchain enables fast, low-cost transactions and supports smart contracts. It powers blockchain applications including NBA Top Shot, a non-fungible token (NFT) offering [RefB].

Ethereum

Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization. Ethereum was conceived in 2013 by programmer Vitalik Buterin [RefA].

Methodology

The price of an asset in financial markets is determined by supply and demand. Buyers and sellers agree on the transaction price by forming buying and selling queues and proceed to transfer ownership of assets. In the digital currency market, the same thing happens in exchanges and determines the price of tokens. Sharp and sudden price changes can have various reasons, and we will examine two of the most important reasons below:

• Price changes can occur as a result of positive and negative news. This news affects the fear and greed of buyers and sellers and forces them to buy or sell. Also, the unusual behavior of some influential

• buyers or sellers can lead to sudden price changes. For example, a seller who has a lot of property and plans to sell it in a short period of time.

In order to investigate the causes of Ethereum's price drop in recent days, focusing on the above-mentioned two causes, we try to identify the important events of this period and examine their impact on the price. Also, by examining the behavior of buyers and sellers and identifying effective sellers, we analyze the drop in the price of Ethereum these days.