A tumultuous week for the non-fungible tokens (NFTs) market has brought it to historic lows, with liquidity issues rising as traders scramble amidst the price tumble. Even avid traders and collectors are struggling to buy NFTs at such low prices, openly discussing the worrying lack of market liquidity.
Healthy recovery or dead cat bounce?
Despite a brutal week of declines, and the largest liquidation cascade ever registered, the market has shown some signs of recovery in the past 24 hours. Yet, this period feels distinctly different, with traders voicing their concerns about a lack of liquidity and no plans to leverage the plummeting prices.
Traders are unsure whether the recent market rally is merely a temporary bounce or a sign of stability. Some speculate that the traders may have exhausted their funds and that the market might have more to fall.
Where did it all begin?
Azuki’s latest Elementals mint, anticipated initially as the last beacon of hope for Profile Picture (PFP) NFTs, turned out to be a colossal misstep. The endeavor, which had the makings of a quality project amidst of sea of rug pulls, instead catalyzed a severe downturn, causing NFT collections to hit record lows.
Azuki’s team secured an impressive US$37 million in just 15 minutes last Tuesday with the sale of 10,000 Elementals NFTs. However, as the public and many Beanz holders failed to mint and criticized the collection’s art as low effort and virtually similar to the original Azuki NFTs.
In a dramatic drop, Azuki’s floor price fell by 57% in a week, plunging to a low of 5.8 ETH. Simultaneously, the Azuki Beanz and Elementals suffered sharp drops, decreasing 68% and 78%, respectively.
Ethereum and Solana maintain NFTs above water
However, amid this grim scenario, there are glimmers of positivity, especially concerning Azuki’s Elementals. The June 27 Elementals mint marked the single highest day of NFT sales on the Ethereum blockchain this year, generating US$55 million in sales, the highest since May 2022.
The sales volume on Ethereum has been trending upwards since June 17, which may reflect sellers seeking liquidity and buyers snapping up discounted NFTs. In another positive development, Solana’s SMB Barrel Raffle recorded over US$29 million in sales last week.
In a surprising turn, three newcomers have surged to the top ten collections rankings – Azuki Elemental Beans, SMB Barrel Raffle, and Azuki Elementals. These collections have exhibited sales volumes on their respective chains not seen in over a year.
Azuki Elemental Beans, with their new mint last Tuesday, dominated the top 10, securing US$37 million of the US$41 million total.
Meanwhile, Solana’s SMB Barrel Raffle NFTs brought in over US$29 million in sales, marking a significant high point for Solana since May 2022. In fact, the NFT ecosystem on Solana has recently surpassed Bitcoin, with impressive weekly growth of 270% in sales volume.