Nansen Crypto Research published a report on NFTs, which was shared by NewsBTC. The report focused on their performance in light of the ongoing bearish trend. While NFTs were a popular sector in 2021 because they allowed for greater adoption of digital assets, the trend towards Bitcoin and other cryptocurrency has seen them decline since then.
Similar Reading: Axie Incfinity Sales Record a Massive Slump Losing More Than $120 Million| Axie Infinity Sales Record A Massive Slump, Losing Over $120 Million
Nansen claims that their NFT Blue Chip-10 Index and NFT 500 Index showed strength in the last month. Bitcoin and large cryptocurrencies were nearing yearly lows at that point. BTC’s price crashed to a multi-year low of around $17,500.
Nansen Blue Chip-10 reports a 23.6% growth as of June 2022. This could indicate a decline in the industry’s selling pressure. As major crypto investors defaulted on their outstanding debt obligations, the crypto market experienced a crisis in June.
NFTs were used as indicators of crypto market activity in the future. As Nansen’s Indexes trended in the opposite direction throughout June, the positive performance extended and hinted at the formation of a local bottom for Bitcoin and Ethereum.
According to the report, the overall sentiment in crypto markets was positive. NFTs outperformed even periods of chaos and continued selling pressure.
Blue Chip NFTs led the trend reversal in June (…). The bear market rallies that occurred in crypto markets during the June last week were overshadowed by a strong uptrend within NFT markets. Every sector of Non-Fungible Tokens (NFT) saw a rise in June, measured in Ethereum. Gaming NFTs did not see a jump until Q2 2022.
With Bitcoin’s 2017 record high at $20,000.00, some crypto markets saw relief. However, BTC’s price has been losing steam and seems poised for another period of sideways movement and consolidation.
The NFTs and the Crypto Market Short-Term
Nansen also claims that the sector’s recovery may not be sustainable. As you can see below, despite the strong June performance, digital assets report a decline of trading volume, transaction count and active users.
NFTs are adapting to macro-economic changes and reducing risks by registering a decline in sector activity. Nansen noted:
(…) Within the Ethereum (ETH) DeFi sector, we are witnessing a dramatic deleveraging event with a sizable investor base realizing historically significant losses. A ‘risk off’ sentiment is still highly evident in the NFT market and the limited liquidity in the NFT market hints that this uptrend might not sustain (…).
Negative CPI Report Causes Bitcoin Market Cap To Lose $15 Billion In 10 Minutes| Negative CPI Report Causes Bitcoin Market Cap To Lose $15 Billion In 10 Minutes
The sector has seen an increase in buyers first time and a decline in the Buyers-Seller ratio. This metric is used to measure the general sentiment across NFT investors which seems to be more optimistic than in the overall crypto market and, according to Nansen, “highlights the development of NFTs as a sector”.
