Are we entering an NFT Downturn according to on-chain data?
A chilling shift is sweeping across the hot NFT market, as data suggests a downturn marked by relentless selloffs and declining trading volumes, igniting concerns of waning investor interest.
Collections of Ethereum NFTs are witnessing an increasing trend of sellers
A chilling frost is settling over the once sizzling non-fungible token (NFT) market, as persistent selloffs and waning trading volumes breed growing unease among investors, sparking worries of a cooling enthusiasm in the booming sector.
Following a stratospheric surge of interest in NFT collections like Milady (LADYS), market data suggests the exuberance may be subsiding, according to figures from NFTstatistics.eth. The data shows that Ethereum (ETH) volume on Blur (BLUR), a popular NFT marketplace, is being dominated by sellers. In fact, 92% of ETH’s volume consists of sellers dumping into bids, a concerning trend that might signal falling demand.
According to Dune Analytics, this apparent drop in demand coincides with a significant slump in trading volumes across exchanges, echoing the trend of declining market activity and trader participation. Although OpenSea continues to corner the market with a 47% share of NFT trades, Blur now holds the leading position in terms of volume, with 5.2% of the market share.
A cross-chain phenomenon
The changing wind is not solely an Ethereum phenomenon; Dapp Radar’s data revealed that NFTs on the Polygon (MATIC) network, including y00ts and the Trump Card Collection, are also experiencing falling levels of unique active wallets. Similarly, Solanafloor’s Blue Chip Index points to a fading interest in Solana’s (SOL) most sought-after NFTs.
Furthermore, Yuga Labs’ Mutant Ape Yacht Club (MAYC), a star performer in the NFT collection sphere, is also feeling the pinch with a significant drop in sales, as large-scale holders offloaded an alarming 160 NFTs over the last few days, creating a substantial selling pressure that could further depress floor prices.
Alongside this, Ethereum’s gas usage is also falling due to a steep decline in the number of NFT trades, signaling dwindling participation and fading interest in the NFT market.
The NFT market’s sustainability
These diverse developments and the selloff spree from major players leave the NFT market on shaky ground. The pervasive decline across multiple platforms and collections may signal a broader shift in the market, reflecting fading enthusiasm and a potential slowdown in trading activity.
These trends underscore an urgent question about sustainability and continued interest in the NFT market, suggesting the initial hype surrounding NFTs may be giving way to a sobering reality check. For investors and traders, these are times that call for careful scrutiny and thoughtful decision-making.
