Weekly Market Outlook
A good week for NFTs! Daily volume in Opensea was consistently above $40 million, except for July 19th. Looking at volume month on month, we are still down -20.75%. However, compared to the last week, it is a 15% uplift. Why? Probably because of the improved market sentiment for crypto. The bulls are temporarily back and potentially taking profits to buy NFTs.
source: nftgo
If we look at volume from a user perspective, it shows us additional details.
Volume per user in July is at a yearly high. Another confirmation of positive sentiment in the NFT space. Blue chip projects like Yuga Labs (owners of Bored Ape Yacht Club) have created hype around their metaverse - The Otherside. Also, the team behind Moonbirds revealed their companion collection - Moonbird Oddities. These attracted holders, buyers, sellers, and traders during July.
source: dune
From a macro perspective, in the last 24 hours, most NFTs are in green. Holders are marginally up, but trading activity is considerably high. Of course, buyers are up, but the significant increase is in the number of sellers (+24%). It reflects the good mood in the space. Will this sentiment continue into next week or even next month? We have to wait and see. Are sellers using this opportunity to move out of projects for liquidity? Quite possible, and It is something to keep an eye on.
source: nftgo
NFT Collections Check
The NFT space moves at a fast pace. A new collection can quickly gain momentum. But within hours, that momentum could disappear. Serial NFT Traders can swiftly leave a project and are onto another hyped NFT. However, when it comes to volume, it is difficult to beat the blue-chip collections.
From a 7-day perspective, volume is down for CryptoPunks and BAYC. We have seen new collections like Moonbirds Oddities and the latest installment of STEPN Shoeboxes come into focus. Both are perceived as blue chip collections lately.
NFT Collection Reveal Strategy
Last week we talked about staying safe with NFT mints. Now let’s discuss how to time an NFT collection reveal.
Commonly, the floor drops after the reveal. In terms of probability, there is above 90% chance that this will happen!
Why does a collection dip after the reveal?
It’s the hype that builds up the buying pressure, and it acts as a high liquidity event. Everyone hopes to get the rarest one, and as this is unlikely to happen, people begin selling NFTs with common traits. Soon enough, when everyone sells, the floor dumps.
Projects can only prevent that from happening by announcing something unexpected. Again this is rare, so no bullish news accompanies NFT reveals. Alternatively, projects can reveal the NFTs at the mint. Moonbirds did this, and there was a lot less volatility, and the floor price held up much better.
Anyway, projects have different reasons to delay the reveal. Mainly because;
- Art not ready at NFT launch
- NFT sales is a capital raising event to kickstart the project
- Create hype and narratives
Anyhow, these reveals for hyped projects bring in a lot of volume. More volume means more royalties for the project too. That’s not always in favor of the holders, unfortunately.
Is it best to always buy from a secondary marketplace?
Minting an NFT collection is always the safest option to make money. You can decide on the mint day if there is enough demand and whether the secondary price will be high enough to make a profit. If not, you can skip a project mint and move on. You can always mint for utility, art, or to be part of a community. It does depend on your motives and priorities.
The go-to strategy when it comes to collection reveals
Most of the time, it’s financially beneficial to sell before the reveal and ride the hype. However, if you see long-term value, buy back a few days later when the dust has settled. It also allows you to get an art piece you like to hold for a longer term. At the same time, it avoids being stuck with a random NFT that may not have an appeal. But for immensely hyped projects such as The Otherside, people tend to hold through reveal and gamble on a rare one. The upside is astronomical with those types of collections. But if you do not plan to hold an NFT, selling before the reveal is usually the best way to make money.
Well, that is a wrap for the Weekly NFT Report! See you next week.