Bitazza Crypto Weekly: Big Risks and Big Opportunities in NFTs -

Crypto Weekly: 18 – 24 July 2022

Despite the firm belief held by the crypto industry regarding the future growth and potential of NFTs, sluggish market conditions during this crypto winter have contributed to a significant decline in NFT popularity.

Global research and consulting group Verified Market Research (VMR) has valued the worldwide NFT market at $11.3 billion in 2021 and predicts that the sector will increase at a compound annual growth rate of 33.7% over the next eight years. At this rate, the non-fungible token (NFT) market will be worth $231 billion by 2030. The growing use of NFTs in various fields and spheres of life, such as music, movies, and sports, is a significant factor driving demand for them and is a factor behind the projected valuation of the NFT sector.

Shanghai is planning to boost the development of innovations such as blockchain, non-fungible tokens(NFTs), Metaverse, and Web3 during its next five-year plan focused on the development of Shanghai’s digital economy and promoting the integration of digital technology and real-world economy. The proposed plan will support the establishment of NFT trading platforms and the digitization of other assets into NFT form.

Despite optimistic projections of the long-term future of the NFT industry, OpenSea’s co-founder and CEO, Devin Finzer, has announced that the world’s first and largest NFT marketplace has laid off over 20% of its staff, citing an unprecedented combination of crypto winter and broad macroeconomic instability.

A blockchain analytics service, Nansen has published its NFT Indexes Quarterly Report for Q2 2022. The report assesses the performance of the NFT market and provides an analysis of NFT volume statistics on Ethereum that reveals the decline in trading volume of NFTs to 600,000 ETH in June, the lowest figure of this calendar year.

Chinese multinational technology conglomerate Tencent has reportedly shut down its NFT marketplace because of the regressive monetary policies of the Chinese government that prohibits buyers from selling their NFTs in the secondary market after purchase, which essentially limits any chance of making a profit on the NFT market.

Crypto lending firm Celsius has filed for Chapter 11 bankruptcy with the United States Bankruptcy Court for the Southern District of New York despite having just paid off debts to DeFi crypto lending platforms such as Compound, Aave, and Maker for over $820 million.

US crypto lender Voyager Digital has said that they cannot guarantee the exact amount of funds that will be reimbursed to users as they are still owed $650 million in outstanding debt by Three Arrows Capital as well as voyager’s ongoing restructuring plan.

The Financial Stability Board (FSB) has pledged to unveil new regulatory proposals seeking to ensure that crypto assets and stablecoins are subject to more robust regulations and supervision to the G20 Finance Ministers and Central Bank Governors this coming October.

Over 48 projects on Terra Chain have migrated to the Polygon ecosystem. Moreover, Polygon has recently been selected to participate in Disney’s 2022 Accelerator program; the program allows participants to receive mentorship and guidance from the Disney Accelerator Team, with Polygon being the only blockchain provider chosen for the program.

Analysts from JPMorgan Chase report that Bitcoin’s production cost has dropped from about $20,000 at the start of June to around $13,000, citing a decline in electricity consumption. This may be perceived as bearish news for the Bitcoin price outlook moving forward, as investors already holding BTC in their portfolio stand to lose more and more as the correction continues.

Weekly Technical Analysis: 18 – 24 July 2022

Bitcoin (BTC)

BTC has yet to create new highs despite not making lower lows. The trend will be likely to continue sideways. BTC will have to break through an initial $22,500 resistance level to rally. Subsequently, BTC will have to break through resistance at the $25,000 mark to confirm an upwards reversal with its first support level set at $19,000 if it can do so.

Ethereum (ETH)

ETH has started posting higher returns than BTC this week and has the potential to revert to a short-term uptrend with a support level at $1000. If this support can remain intact, it is likely that the price will continue to rise. On the other hand, investors are advised to slow ETH purchases if this support cannot remain intact. If ETH can surpass the $1,700 resistance level this week, the probability of reverting to an uptrend is strong.

Curve Finance (CRV)

CRV is up +20.6% over the past week; its overall trend remains upwards from last week, with its short-term support level set at 36 THB and a critical support level at the 30 THB mark. If CRV manages to remain above this level, its overall trend will likely remain upwards with the next resistance level at 50 THB. Investors are advised to time their trades and by when prices dip.

Polygon (MATIC)

MATIC is up +39.1% over the past week and could manage an upwards reversal in the short-term, thanks to current positive news regarding Polygon. MATIC has its first support level at 26 THB and a critical support level at 22 THB. If the support level can remain intact, MATIC may continue to rise with its targetted resistance level at 36 THB.

Trading and Investment Considerations For The Week

The US Dollar Index continues to hit new highs in 2022, but Bitcoin’s overall trend remains sideways without creating new lows. This could suggest that Bitcoin prices are becoming more independent from fluctuations of the US dollar.

Keep an eye on the FED’s next move regarding monetary policies after consumer prices hit an all-time high of 9.1% in June. Economists anticipate the Fed will increase interest rates by a full percentage point at its meeting later this month, alongside the release of Gross Domestic Product (GDP) figures.

Critical economic reports/events over the past week indicate a rebound; however, we must still wait to see whether the US economy will tip into a recession as many currently fear. If the US economy enters a recession, this could encourage the FED to slow down its interest rate hikes, which will benefit Bitcoin’s price.

Many Altcoins delivered higher returns than Bitcoin over the past week, especially Smart Contract platform tokens that have had positive news, such as ETH’s upcoming “merge” upgrade and MATIC with the migration of Terra-based projects blockchain to Polygon. With BTC prices moving sideways, perhaps these altcoins could provide more profitable trading opportunities as we await the upcoming FED meeting next week.

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