Bitazza Crypto Weekly: Are NFTs The Great Hope For Crypto Right Now? -

Crypto Weekly: 2 – 8 May 2022

The overall outlook of the digital asset market has been relatively quiet in the past few weeks. While DeFi and GameFi tokens have both struggled during this period, NFT trading and NFT-related tokens have managed to sustain and even gain interest from traders.

For instance, a survey report from CoinGecko projected that NFT business volume could rise to $800 billion during the next two years. The survey sample consisted of investors from the Asia Pacific regions, with more than 50% of them stating that they own five or more NFTS, whole 72% of respondents owned at least one NFT, with the most popular NFT collections being BAYC and CryptoPunks.

A behavioral study report from blockchain market analytics firm DappRadar has revealed that from Q1 of 2022, the number of DeFi transactions has fallen to a one-year low, indicating that DeFi interest and usage is currently ebbing. In contrast, while other market segments have struggled, NFTs have performed well, with the volume of NFT-related trades and transactions increasing by 22% and hitting an all-time high in the same timeframe.

Of note, BAYC has seen its floor value surge to 152 ETH, according to statistics from NFT marketplace Opensea. The BAYC NFTs were launched one year ago for 0.08 ETH each ($200 at the time), which, with current floor prices, means early adopters are now sitting on gains of 216,900% in dollar terms.

Meanwhile, BAYC and APE creators Yuga Labs have announced that its highly anticipated NFT-centric MMO Otherside would no longer use a Dutch-style auction for its Otherside NFT sale. Instead, Yuga Labs will sell Otherside NFTs at a fixed price of 305 APE, with a total of 55,000 Otherdeeds (NFTs representing virtual land on Otherside) and a limit of up to two Otherdeed NFTs per wallet.

Meta’s virtual and augmented reality division, Reality Labs, has officially posted $2.9 billion in losses, according to the quarterly report released by Meta last week. The same report cites that Reality Labs was able to bring in $695 million in revenue, surpassing most expectations and an increase from the previous quarter. Zuckerberg remains optimistic, arguing that whilst VR and AR is not yet profitable for Meta, Reality Labs is laying the essential groundwork for Meta’s future success.

Bitcoin network hash rate has hit a new record high, even amidst price volatility. The mining difficulty rise represents a 400% increase since the mining ban by China last year and signifies that the number of miners on the blockchain is rapidly growing.

Additionally, Bitcoin has become an officially recognized currency in the Central African Republic. This makes the Central African Republic the second country in the world, behind El Salvador, to recognize Bitcoin as legal tender.

Similarly, leading global investment bank, Goldman Sachs has reportedly offered its first-ever cash loan collateralized by Bitcoin. Goldman Sachs has seemingly been increasingly friendly towards crypto, with the investment bank allegedly eyeing a potential partnership with crypto exchange FTX.

According to a report from CryptoCompare, Binance retains its status as the world’s leading cryptocurrency exchange, capturing 30% of spot volume market share in March. The remaining 70% of the volume in the report consists of trading activity from 15 other major exchanges.

Finally, LUNA’s circulating supply has dropped to an all-time low at 346 million tokens. Additionally, the liquid supply, i.e., LUNA available that’s not locked for staking, has dropped to the 90 million mark for the first time ever. The lower supply is a byproduct of the growing demand for UST, Terra’s stablecoin, which mints and burns LUNA algorithmically to balance supply and demand for UST.

Weekly Technical Analysis: 2 – 8 May 2022

Bitcoin (BTC)

BTC faced a sell-off that’s pushed it down to the $37,000 support level; however, prices have not been making lower lows and seem to be rebounding. In the short-term BTC must remain above the $40,000 level for the market leader to have a chance of returning to its $44,000 target. The overall outlook is still sideways and prices remain highly volatile.

Ethereum (ETH)

ETH is ternding sideways down at the moment after failing to create new highs and hitting lower lows. If prices fall past $2,700 and the $2,500 support level cannot remain intact, ETH may start trending downwards. If support can remain intact, ETH could potentially rebound to challenge the $3,000 resistance level.

Ethereum Name Service (ENS)

ENS is up by +60.4% from last week. The short-term trend has successfully reversed into an uptrend. If the 700 baht support level remains intact, ENS can continue to rally. ENS will look to target resistance at 950 baht this week. If ENS is successful we could see a long-term upwards reversal.

Dogecoin (DOGE)

DOGE is up +4.7% from last week, but the overall trend is still sideways. DOGE will have to remain above its 4.20 baht support to maintain upward momentum. If DOGE can sucessfully challenge resistance at 5.80 baht, there is potential for a sustained rally into an uptrend. However, traders should be aware that DOGE prices can be particularly volatile and are susceptible to momentary social media-driven surges such as price fluctuations in response to Elon Musktweets.

Trading and Investment Considerations For The Week

Keep an eye on the FOMC meeting on May 3-4 and whether the FED announces anything regarding interest rate hikes or QE tapering. Previous statements by the FED tentatively implying a 0.5% interest rate rise have affected the markets before.

However, with the annualized pace of US GDP growth in Q1 2022 shrinking by 1.4% compared to the 1.1% expected growth, the FED could decide to raise interest rates by just 0.25% to stave off a further economic slowdown. This scenario would likely prove to be beneficial to the market.

In contrast, if the FED DOES raise interest rates by 0.5% per market expectations, it is possible there won’t be an excessively negative impact on the market as investors likely are already anticipating this scenario. With these two scenarios in mind, Bitcoin’s support at $37,000 may remain intact this week.

In any case, investors are advised to pay close attention to any statements by the FED or Jerome Powell coming out of the meeting as that could provide much-needed insight into which direction US monetary policy will be trending in.

Those with a lower tolerance for risk are advised to stop investing and not enter any positions until the FOMC meeting concludes and market sentiment becomes clearer.

*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.

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