NFT Weekly Preview | Trading Through the NFT Bear Market
The sky is falling in the NFT world, largely as fallout from the pending global recession and crypto/equities crashes.
The CPI number came in higher than expected on Friday and sent stocks swiftly downwards, kicking off one of the worst weekends for the Crypto markets in recent history.
BTC fell 21 percent over the last week, falling through prior support levels, and is now at $23,700 at the time of writing.
ETH was even worse off, falling 32 percent on the week to $1,220. Most alts were even worse off still, including NFT-native ApeCoin, which fell 44 percent on the week and is at its all-time low of $3.44 (this puts Yuga Labs likely upside down on the Otherdeeds sale, with their tax bill currently greater than the value of the $APE revenue generated).
There are some serious issues going on in the Crypto space, with Celsius pausing withdrawals yesterday (and potentially pending liquidation).
Expectations are that the bloodbath will continue this week, as the equity markets look to open deep in the red today. In short, while this has been a swift and brutal leg down, there is no end in sight.
So what does this mean for the NFT space and for NFT traders? Let's start with the NFT market.
NFT Market Data, June 13
The Nansen Blue Chip-10 Index saw 9 of its 10 individual projects fall in the range of 25%-35% on the week, with the lone green floor being CryptoPunks (up 0.07% - we'll take it). Volume is up on most of these sets compared to the prior week, but unfortunately, a solid chunk of that volume is holders racing for the exits (especially in the past few days). There has been a notable uptick in sales activity over the last few days as ETH has been crashing, but these sales are driving down the floors as users hunt for that bid.
The tweet below has been making the rounds this weekend, showing the brutal fall from all-time highs for the top-end sets in USD terms. The sad fact is - these figures are already severely outdated after the ETH and NFT dips of the past 24 hours and they're down another 33% or so. BAYC is sitting at $85,000, Moonbirds at $18,200, Clone X and Azuki are both sub-$10K - it's pretty bad, relatively speaking.
All time highs vs current prices in USD 🥶— renegademaster / guccibayc.eth (@renegademasterr) June 12, 2022
CryptoPunks : 440K ➡️ 69K
BAYC : 435K ➡️ 127K
MAYC : 130K ➡️ 24K
Moonbirds : 117K ➡️ 27K
Azuki : 115K ➡️ 14K
Clone X : 88K ➡️ 13K
Vee Friends : 75K ➡️ 10K
Doodles : 60K ➡️ 15K
Cool Cats : 57K ➡️ 5K
WOW : 50K ➡️ 5K
GCG : 29K ➡️ 7K
The free mint meta is still very present on the weekly board, though anecdotally it feels like the narratives from the recent hype machines are winding down. Of the weekly top ten, five are from the "free mint" sector and its derivatives, but this is mostly due to the dominance of the market action during the week last week as its since fallen off this weekend, as they begin their slow death spiral back to zero.
Not even the art sector is being spared, as The GODA Mint Pass debuted this past week, traded 2,660 ETH in secondary volume but saw its floor fall from the 7-8 ETH range to 4 ETH. Art Blocks is back to not selling out its project mints, evidenced by Friday's Factory drop which only minted 20 percent of the supply
So what is an NFT trader to do here? Well, there are a few options:
- Sell everything (or a majority), move to stables, and wait for the bottom / a strong reversal.
- Hold and basically stop paying attention / walk away for a while.
- Keep grinding for new opportunities.
I wouldn't blame anyone for following these options, but I believe there will be continued opportunities for gain in this NFT market even through an extended bear. And the only way to capitalize on those opportunities is to stay in the game, keep monitoring the space and be ready to move in the right spots.
Let's look at this week's most hyped drops and see if there are indeed some good spots to move.
This Week's Top NFT Mints
Top new mints for this week include:
- Lacoste UNDW3
- Sneaker Heads
Famed fashion brand Lacoste is making their entry into NFTs on June 15th, as they launch 11,212 Lacoste NFTs for 0.08 ETH each.
From the project's website, "WEB3 pioneers will be able to join the iconic brand as they take members on a journey to experience collaborative fashion in a new creative way."
There is not a whole lot else about the mint on the site, other than mentioning that holder will be given exclusive access to products and content "created by the community for the community." There is a roadmap, but round two is blurred out making it pretty cryptic (along with what the NFTs actually are - crocodiles?).
Brands have certainly had mixed success launching NFTs, based on the approach taken. There has not been a ton of hype around this drop, and given the supply and price, it may struggle to mint out in this market. But with a name as big as Lacoste, always worth paying attention.
P̵r̵o̵b̵a̵b̵l̵y̵ Definitely nothing.😏 #UNDW3 pic.twitter.com/a0lr7ljs3R— Lacoste (@LACOSTE) June 11, 2022
Arguably the most hyped drop of the week is Sneaker Heads. This new project coming June 18 at 3:00 p.m. ET with 5,000 NFTs priced at 0.25 ETH each is touted as "bringing streetwear culture to web3."
Each of the NFTs is literally a sneakerhead (heads made up of sneaker components) and has been hand-drawn by artist Ali Dawood, leveraging forty different sneaker models.
The project appears to be very focused on building its community and in fact, has the lofty goal of creating "Web 3.0's largest sneaker community". There are strong references to utility as well, including a nesting-like feature called "stock'em" which will allow owners to accumulate more benefits over time the longer they are "stocked." The team has plans for major collaborations and is focused on building a strong global brand and ecosystem.
With over 319k followers on Twitter and a fully allowlist mint, expect some serious demand for this one even with the 0.25 ETH mint price. If the sneaker community comes out for this one, it could really blow up. The stock'em feature does indicate that the listing volume should be lower than the average project over time, and if it works out anything like Moonbirds, it could be a big win for holders. With that said, it's still a very precarious market to launch into, and if most of the allowlist is simply flippers, this may not go well.
👟🌐— Sneaker Heads (@sneakerheadsoff) June 1, 2022
We just launched our new website and we're so excited about what we're building. It’s more than just an avatar project. https://t.co/513zl1jkec
📌Mint Date : June 18th
⏳Public Raffle starts : June 3rd pic.twitter.com/pGZO5rjm5r
The latest anime NFT project is set to launch this week starting June 14th, as Anero debuts its "brand without bonds." The project has a fairly standard goal to create a decentralized brand and a blueprint to build something magical together (a lot of fluff). Their transit map (i.e. roadmap) has the typical metaverse ("aneroverse"), physical world (merch), metaverse, and airdrop components, and generally feels fairly uninspired.
Unfortunately, the founder bio for CEO Adnan on the website has both a spelling error and a blatant ripoff from Azuki, as his bio states he is just here "to build dope sh*t." Not great, and lack of attention to detail is always a bad sign ahead of a big launch.
With over 190k followers on Twitter, certainly, this one has a shot to sell out, but there are some red flags to be aware of for anyone looking to go after on secondary. Be careful with this one.
🚨 \\ [BOARDING] // 🚨— ᴀɴᴇʀᴏ (@AneroVerse) June 10, 2022
mint details are now available AND below are the links to the wallet collections for ALL of our riders.
🎖 OGs: https://t.co/wtO76w49y0
🌃 Night Riders (WL): https://t.co/TTVD558SUR 🚈
➡️ Public: https://t.co/ArdefhgIAG ⬅️
🧵 (1/x) pic.twitter.com/NBpKzVkjkZ
Given market conditions, one of the best strategies will be to continue grinding whitelists to look for the best entries into top projects - Bubbleworld looks to capitalize on that with their own access pass NFT similar to PREMINT. The project's pitch deck indexes the "curated set of NFT collections from treasured creators" that NFT owners will be granted access to by holding.
Those who mint the Founders Pass (10,000 editions) will receive WhiteList to 100% of Curated collections, a guaranteed allocation of the Bubblehouse token, and reduced mint pricing (30%) for curated collections and 50% reduced trading commissions. There are enhanced benefits for the 300 Exclusive Founders Passes and Supreme pass. The founders appear to have partnered with IRL influencers as collection launch partners, thus appearing to branch out into different markets than typical NFT buyers.
With mint passes, there's always the chance to "make it all back in one WL", but given the general unknowns of what these future projects may be and/or their demand, this one might be better to watch and let them prove out their utility before buying.
The moment you’ve all been waiting for… ✨ pic.twitter.com/lTtqOPkHDB— Bubbleworld | Minting June 16th (@TheBubblewrld) June 7, 2022
Overall it is not a great week of new drops, pending any still unknown stealth drops. Sneaker Heads is likely the prime one to watch, with Lacoste coming in second. It will be important to stay in tune with daily volume numbers and the macro picture as well, before making any big moves.
And while that macro picture is bleak, there are some reasons for optimism in the NFT data. NFT weekly users have not crashed and are hanging in the 150-200K range (down from 200-250K at peak in early 2022. Transactions per week are actually steady or on pace with early 2022.
There is still some liquidity in the market as well, despite what some influencers may be touting. In fact, while USD volume may be down quite a bit this month, ETH volume is actually ahead of last November's bear market and more in line with December. So the liquidity situation is not nearly as bad as it seems, in ETH terms.
So while things may look grim, at least users are still here and actively trading - it could be a lot worse (and who knows maybe we get there).
From a trading perspective, now is the time to really tighten up and only chase the highest conviction plays (ideally at very low prices). The idea is to find spots where the upside is greater than the downside, and unfortunately, we are not there yet in most of the established projects (meaning they can still fall quite a bit). Don't try to catch falling knives. Instead, focus on the new projects from strong teams which have attractive entry prices with much more limited downside. And tighten up your target sell prices - single and doubles are okay in this market (even great!). Don't try to make it all back in one trade.