Are we in the midst of an NFT market crash? – Crypto mode
As cryptocurrencies continue to bleed value, value should flow into NFTs as a “safe haven.” But unfortunately, it seems more likely that we are in the middle of an NFT market crash. Despite some high-value sales, all key metrics have declined significantly over the past month.
NFT Market Crash Outlook
It’s not too hard to see why people think the current status quo is part of a wider NFT market crash. There is no shortage of new projects landing on OpenSea or other marketplaces, but there seems to be little excitement. Some top projects continue to record strong and significant sales, but that does not mask the overall downward trend in this industry.
One can analyze the “health” of the NFT market through several crucial calculations:
- Primary versus secondary sales
- Unique buyers and sellers
To avoid an NFT market crash, at least one or two of these metrics should generate positive momentum. Unfortunately, that is not the case, as all key figures have been in a downward spiral over the past month. Not by a fraction either, as everything has dropped by at least 38% and up to 80.7%. It is not a healthy sign for the industry and it seems that the “fear” affecting cryptocurrencies is spilling over into the NFT segment.
People are buying fewer NFTs
The first sign of an NFT market crash is a decline in overall buying and selling activity. While it’s not unusual to see ebbs and flows on that front, the current downtrend is very telling. But from a monthly point of view, nothing is exciting, and no immediate change is expected either. Things could still turn around in the coming weeks, but that seems unlikely due to unfavorable macroeconomic conditions.
Below are a few key trends (data from NonFungible) confirming current NFT market crash outlook:
- Sales go down too almost 57% MoM, down to 15,000-ish
- The sales volume has decreased as well almost 77% to $6 million and change
- The average NFT sale price is $431, a 46.14% decline
- Primary and secondary sales volumes also decreased 80.7% and 76.53%respectively
All these trends confirm that people are less eager to buy NFTs, let alone spend significant amounts on virtual art. The average selling price of $431 is still quite high, but that decrease of almost 50% confirms the general interest. Also, it has become much more challenging for creators to sell their NFTs directly, let alone through secondary sales. The NFT industry is not in a good place right now.
Lower user activity
Making matters worse is the ongoing decline in user activity. It is measured through the number of active wallets on NFT marketplaces and the number of buyers and sellers. All three metrics have fallen sharply in the past month. The decline in active wallets is particularly worrying.
- Active market wallets also fell 56.29% to the 10k range
- Unique buyer levels are just over 6,000, a 57.1% reduce MoM
- Unique seller levels are over 5000, a 59.11% decline over a month ago
The bigger question is whether the momentum can reverse. Sizable sales across Bored Ape Yacht Club, Don’t Panic, Pudgy Penguins, CryptoPunks and Otherside continue to make headlines. But people who spend between $500,000 and $1 million are few and far between. Also, the NFT industry needs many more collections to succeed in the long term. Revisiting the same profile picture collections over and over will get old, eventually.
All signs point to an ongoing NFT market crash from a short-term perspective. Zooming out the annual performance, things don’t get any better. NFTs seem to have peaked a year ago and despite an uptrend earlier in 2022, the downtrend continues.
CryptoMode produces high quality content for cryptocurrency companies. We have provided brand exposure for dozens of companies to date and you could be one of them. All our customers appreciate the relationship between value and price. Contact us if you have any questions: [email protected]
None of the information on this website is investment or financial advice. CryptoMode is not responsible for any financial losses incurred by acting on information provided on this website by its authors or customers. No reviews should be taken at face value, always do your research before making a financial commitment.
