Fallout from crypto contagion subsides but no market reversal just yet

The blockchain industry showed some surprising resilience in July, which may point to a period of greater fundamental support for the crypto space overall in the short term. In looking at a wide variety of indicators, including Bitcoin’s (BTC) price action, open interest on Ether (ETH) and activity in GameFi, there are some strong signals to suggest that a bullish sentiment is returning to this space.

Smooth sailing from now on is not a given, though. Cointelegraph Research’s latest Investor Insights analyzes key indicators from different sectors of the blockchain industry to navigate those potentially treacherous crypto waters. In the latest edition, Cointelegraph Research’s bearish-to-bullish index was a level C indicating a short-term cautionary time. While there are still mixed signals, the overall sentiment was leaning toward the bulls for July.

Download and purchase this report on the Cointelegraph Research Terminal.

Bitcoin and Ether show 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 range with a level of resistance around $24,000; however, the repeated approach and rejection are likely to break at some point if factors change, such as positive economic growth reports from the United States 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 shows signs of life

The GameFi sector has been on a decline since the large market crash in the first half of 2022. However, July saw a 4.7% jump in new users across all of 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 made up more than 36% of the $976 million of total NFTs value sold in July. This helps to paint the picture of activity and strength returning to some segments of the market.

Venture capital investment decline

The venture capital investment totals have been on a decline for the past few months; however, July saw capital inflows down 43% from June, to around $1.9 billion. This suggests that what can be perceived as a bearish sentiment at first glance may warrant a pulled-back wider view.

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 subside moving through the second half of 2022 and into 2023, as the crypto contagion of failing blockchain companies seems to have fully played out.

The Cointelegraph Research team

Cointelegraph’s Research department comprises some of the best talents 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 the director of research at Cointelegraph. Hays has compiled a team of subject matter experts from across the fields of finance, economics and technology to bring to the market the premier source for industry reports and insightful analysis. The team utilizes APIs from a variety of sources in order 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 its combined talents to proper use with the Investor Insights Report.

Disclaimer: The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.