NFT market surges post new year even as Ethereum continues to be in consolidation

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Bitcoin and Crypto Market Watch Tuesday, January 04, 2022 - 17:53

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As we step into 2022, Bitcoin (BTC) continues to wither below the psychological level at $50,000 as the strengthening US dollar hampers a reversal of the current downtrend. Despite the bearishness, Algorand (ALGO), Chainlink (LINK), Cosmos (ATOM) and Fantom (FTM) have registered moderate to strong gains over the last day. The total crypto trade volume has picked up pace by a substantial 43% today indicating a propensity to buy at these levels. In today’s article, we analyse the last week’s price actions of major cryptocurrencies and a brief look at the non-fungible token (NFT) market.

Bitcoin and Ethereum on Support

Ever since the flash crash in the beginning of December, BTC has been facing selloffs on every minor rally. The recent failure to claim the 20-day exponential moving average (EMA) near the $48,500 region indicates that the bears are in control for the short term. BTC will now rely on the crucial support level at $45,600 in case of a decline. The good news is that the selling volumes have simmered down which is usually a sign of seller exhaustion and a relief rally might be in line next.

Ethereum (ETH) has held strongly during the recent bearish climate after losing the psychological level at $4,000. Given the red wick post the December flash crash was contained near $3,500 by the bulls, ETH found support at $3,580 to build momentum towards next major resistance at $3,880, its 20 day EMA. It is currently trading at $3,760 with a 3.6% decline over the past week.

Fantom, Near and Harmony rakes gains

Fantom (FTM) has been a strong performer since Christmas registering more than 30% gains in the last 7 days to trade at $2.88. Essentially, as the design of Fantom protocol allows developers to migrate their existing Ethereum-based dApps onto Fantom mainnet, many decentralised finance (DeFi) applications are locked on its network. FTM currently has over $5.6 billion value locked on its network.

Another coin that has performed strongly is Near Protocol (NEAR), a layer 1 blockchain that is designed to eliminate low transaction speeds and increase interoperability. The support for NEAR is likely to be around $13 - $14.50 area if it dips. NEAR is currently at $16.7 with its all time high at $17.95. NEAR is up 15% over the last day.

Harmony (ONE) had a 10% bump in price with a similar narrative that it will help run ETH applications with 2-second transaction finality and lower fees.

NFT market surges

While some may view ETH’s price performance as disappointing, NFT collectors seem to be taking advantage of ETH consolidation. The first three days of 2022 saw $675 million in NFT sales which is more volume than the first 6 months of 2021 put together. Well known NFT projects like Bored Ape Yacht Club (BAYC) have raked in more than 20,000 ETH in volume last week and generated a substantial $1 billion in total sales till now.

Demand for the digital arts is shooting rapidly as more projects are being created and listed on NFT trading platforms like Opensea, Nifty Gateway, Async art etc.

Martin Garrix, Post Malone, Snoop Dogg have already joined the NFT movement with Rapper Eminem joining the BAYC club this week by spending around $462,000 on a single NFT.

Short-term Outlook for Bitcoin

Given the low influx of new retail participants since May 2021, the recent price actions of BTC are thought to be swayed by institutions who have been flocking to the cryptocurrency market in the last 6-8 months. So, until trade volumes go up, BTC is expected to undergo consolidation for the rest of Q1 2021. For the short-term, BTC might test the lower wick at $42,000 if the downtrend continues before turning bullish.

Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.

 

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