The fallout from crypto contagion is slowing, but no market reversal yet
The blockchain industry showed some surprising resilience in July, which could point to a period of greater fundamental support for the crypto space in general in the near term. Looking at a wide range of indicators, including Bitcoin’s (BTC) price action, open interest in Ether (ETH) and activity in GameFi, there are some strong signs that bullish sentiment is returning to this area.
However, smooth sailing from now on is not a given. Cointelegraph Research’s latest Investor Insights analyzes key indicators from different sectors of the blockchain industry to navigate the potentially treacherous crypto waters. In the last edition, Cointelegraph Research’s bearish-to-bullish index was a level C indicating a short-term warning period. Although there are still mixed signals, overall sentiment was bullish for July.
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Bitcoin and Ether are showing signs of strength
Bitcoin closed July up 16.6% since the start of the month, a gain not seen since October 2021. BTC continues to fluctuate with a resistance level around $24,000; However, the repeated approach and rejection is likely to break at some point if factors change, such as positive economic growth reports from the US and elsewhere. At the same time, Ethereum saw an all-time high of unique active wallet addresses, 48% higher than previous records. Both indicators are bullish for the blockchain space.
GameFi is showing signs of life
The GameFi sector has been on the decline since the big market crash in the first half of 2022. However, July saw a 4.7% jump in new users across GameFi compared to June. Some highlights from this sector include the sale of digital real estate and the sale of a Genesis Land plot, which went for 550 Wrapped Ether (wETH). Nonfungible tokens (NFTs) that were part of the GameFi sector accounted for more than 36% of the $976 million of total NFT value sold in July. This helps paint the picture of activity and strength returning to certain segments of the market.
Venture capital investments are falling
Venture capital investment totals have been on the decline in recent months; In July, however, capital inflows fell by 43% from June, to around $1.9 billion. This suggests that what may be perceived as a bearish sentiment at first glance may justify a broader view being pulled back.
The reason is that these are levels of capital investment in the blockchain industry that have not been seen since the start of the 2021 bull run. This is also likely to taper off through the second half of 2022 and into 2023, as the crypto contagion from failing blockchain companies appears to have fully played out.
The Cointelegraph Research team
Cointelegraph’s research department is made up of some of the best talent in the blockchain industry. Bringing together academic rigor and filtered through practical, hard-won experience, the researchers on the team are committed to bringing the most accurate, insightful content available on the market.
Demelza Hays, Ph.D., is Director of Research at Cointelegraph. Hays has assembled a team of subject matter experts from all areas of finance, economics and technology to bring to market the premier source of industry reports and insightful analysis. The team uses APIs from a variety of sources to provide accurate, useful information and analysis.
With decades of combined experience in traditional finance, business, engineering, technology and research, the Cointelegraph Research team is perfectly positioned to put their combined talents to good use with the Investor Insights report.
Disclaimer: The opinions expressed in the article are for general information purposes only and are not intended to provide specific advice or recommendations for any individual or about any specific security or investment product.
