NFT spotlight - ENJ

Summary

• NFT revival sees renewed interest in ENJ
• Some positive behaviour observed but macro factors and key metrics shows that it remains challenging for a ENJ bullcase.
• Further dips and change in behavior over the next few weeks could change the outlook.

Metrics used:

• Daily active addresses (DAA)
• Price/DAA divergence
• Holders distribution
• MVRV
• Dev activity

As the DeFi craze cools off, a new segment has emerged and is being touted as next "DeFi craze" - Say hello to the NFT segment.

Now, the NFT segment isn't something new, it has been around for some time now, but had a renewed interest near the tail-end of the DeFi mania in September. And it's getting hard to ignore when there's a growing amount of mentions in social media during this period.

Whether or not this segment will lead the crypto markets into the next bull cycle is yet to be seen.

Wait, what's an NFT?

A non-fungible token (NFT) is a type of cryptographic token that represents a unique asset. NFTs are tokenized versions of digital or real-world assets. They function as verifiable proofs of authenticity and ownership within a blockchain network. NFTs are not interchangeable with each other and introduce scarcity to the digital world. - Binance

To learn more about NFTs, here's a nice guide by Cointelegraph.

One of our community members recently pointed out that something was up with ENJ, and

From the list of NFTs, we recently highlighted ENJ (thanks to a community member's request), now let's take a quick look at how things are.

Enjin (ENJ)

Social volume

Current Social volume isn't as high as what we saw over the past 6 months but the same sequence occurred to signal a local top (spike in price, spike in social volume, followed by fall in social volume).

Interestingly, "NFT" mentions coincided with the recent ENJ rally.

Perhaps the crowd was speculating on ENJ being the go to NFT platform?

Daily Active Addresses (DAA) and Price/DAA divergence

After having a falling DAA for the past few months, it has finally broken out and normalizing above the lows.

Generally, a gradual increase in DAA and increase in price is healthy. What we do not want to see is an increase in price and falling DAA (like what was observed in July - early Sept).

Also, the DAA breakout came at the recent dump where price sets a lower low. This might indicate that the a good part of the crowd might have capitulated in fear of prices going even lower.

Top 50 non-exchange holders vs Exchanges

The amount of ENJ held by the top 50 non-exchange holders (pink) have been growing since August, which suggests accumulation. However, the recent spike in price saw them reduce their positions.

Meanwhile, ENJ on Exchanges (Brown) continue to fall since August.

Holders distribution

Looking at the Holders distribution, we can observe:

• Retail holders - addresses that hold between 10,000 - 100,000 ENJ (Brown line) have increased significantly since March, coinciding well with the parabolic rise in price but have topped out in June and have since been on a decline. Recent drop in price also saw a decent dip in retail holders.
  
  A further drop in price would likely see a bigger dip as retail gets freaked out.
  
• No. of Whales - addresses that hold > 1M ENJ (Pink line) have been declining since May. The recent dip in place saw a bounce in no. of whales, suggesting some accumulation.
  
  Generally, we want to see increase in No. of Whales (smart money) over time as they are the ones that move the markets. e.g like the one seen from Oct 2019 - Nov 2019.

MVRV (30D)

MVRV shows the average profit/loss of all the coins currently in circulation according to the current price.

Using the MVRV (30D), it's currently sitting at around 0.933, meaning that users that acquired ENJ 30 days ago from current date is on average -7% down if they were to sell today.

Generally, the risk decreases as MVRV (30D) goes down. In particular, anything below 0.83 tends to be a nice spot to consider (bearing in mind the overall market tend).

Meanwhile, if MVRV (30D) is above 1.10, risk is increased and usually signals a top (zone marked in red).

In view of that, ENJ might have some room to decline further before it gets picked up again.

Dev activity

One of the key things to watch out for is whether a project is still active in their development or is the project dead. In ENJ's case, we can observe that over time, increased dev activity have shown a nice positive correlation to price.

However, recent dev activity have pretty much dipped to around March lows, which isn't a healthy sign.