Introduction

Introduction to different protocols

What Is Algorand (ALGO)?

Algorand is a proof-of-stake blockchain cryptocurrency protocol. Algorand is a self-sustaining, decentralized, blockchain-based network that supports a wide range of applications. These systems are secure, scalable and efficient, all critical properties for effective applications in the real world. Algorand will support computations that require reliable performance guarantees to create new forms of trust.

What is 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. 

What is monero ?

Monero is a decentralized cryptocurrency. It uses a public distributed ledger with privacy-enhancing technologies that obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading monero, transaction amounts, address balances, or transaction histories. 

What is solano ?

Solana is a public blockchain platform with smart contract functionality. Its native cryptocurrency is SOL.

Objective

Analyse if the price of Algorand is 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? How does this compare to other networks such as Solana? Note your findings and anything else that may be interesting in relation to Algorand's price movement!

Information regarding analysis

To answer the question, I would require the daily prices of BTC, ETH, algo, solano. As these are not on the databases completely. We track the prices using their wrapped alternatives from

flipside_prod_db.ethereum.token_prices_hourly

1. BTC <-> WBTC

2. ETH <-> WETH

3. SOL <-> WSOL

4. XMR <-> WXMR

   \

Algo rand prices are directly available here, flipside_prod_db.algorand.prices_swap

I would also like to make it clear that we will only consider only timeline of 2 months so that we can see the influence of other coins on algorand due to the recent market volatility in the past 2 months

Analysis

Comparing Algo Price with other crypto projects,

Comparing Price of algo with other cryptos, we see that algorand price is very similiar to that of solano, btc, eth. However it is very different to monero. Additionally, we see that algo is the most similiar to solano.

correlation between different projects

We now look at the correlation between different projects

We see that the price of algorand is more correlated with the price of solano ( it has a 0.96 correlation coefficient) while it is highly correlated with ether ( correlation coeff of 0.92). However, it is the least correlated with monero (0.72).

Comapring algo price with parameters

I compare the algo price with some derived parameters. the parameters are.

1. The number of transactions on chain daily.
2. The amount of algos transffered daily
3. The amount of algo that have been sent into swap pools.

I notice that the price of algo is slightly correlated with the total number of transactions on chain daily. while it is slightly negative correlated with the amount of algo sent, and it not correlated with the amount of algos deposited into swaps.

Is it the same with solano?

Comapring algo price with parameters

I compare the solano price with some derived parameters. the parameters are.

1. The number of transactions on chain daily.
2. The amount of solano transffered daily
3. The amount of solano that have been sent into swap pools.

I see that the price of solano is not highly correlated with any of the facores. However, it appears to have a correlation with number of transactions. While it has a weak correlation with amount of solano sent, it not at all correlated with solano sent into swaps.

Conclusion

The price of algorand is most correlated with solano price.