Is the NFT Bull Market Back? Here’s what the data says
The NFT market took a pretty significant beating in the year 2022 despite reaching its highest trading volume at the start of the year. Since then, volume has fallen more than 94% as investors move away from these highly illiquid assets. However, there has been an uptick in NFT volume over the past month, so is the NFT bull market back?
What the data says
Looking at data from IntoTheBlock, it shows that there has been an increase in NFT trading volume over the past month, but this has not been a steady growth. In fact, the graph shows more of a zig-zag pattern which means that the volume has seen ups and downs during this time.
Daily trading volume at the beginning of December was $33 million, and by December 29 this figure was $47 million. So this represents around 42% increase in trading volume in 30 days. However, zooming out and looking at the 7-day chart shows a more bullish movement.
At $20 million on December 25th, there has been a more than 100% increase in daily volume over the past week. This explains the renewed vigor in the NFT market this week, but it does not necessarily mean that the NFT bull market is back in full swing.
Volume grows 42% in December | Source: IntoTheBlock
The fact remains that the number of NFT sales has decreased in recent days, with 63,000 new sales on Thursday compared to Wednesday’s 123,000. So while dollar volume may be up, investors are still buying fewer NFTs and the number of collections is also down.
NFT popularity continues to decline
As with any new space, the popularity of NFTs was largely driven by the adoption of new users. This is what drove it to its peak in January 2022, but it has not been able to sustain this momentum. According to IntoTheBlock, the number of new addresses buying NFTs is on the decline.
Market declines over 60% in 2022 | Source: Crypto Total Market Cap on TradingView.com
On Thursday, December 29, just 5,780 new addresses used NFTs, hitting a nearly two-year low. The last time it was this low was in February 2021 when non-fungible tokens were still trying to establish themselves in the crypto market.
Collections being created have also reached a one-year low. Just 675 new collections were created on Thursday, bringing it down to November 2021 levels. Other key metrics include the number of unique collections purchased, which was 111 for the same time period.
On a more encouraging note, the XRP NFT market has seen an increase in adoption. On Friday, that crossed the 7.3 million XRP mark in total sales volume.
Featured image from APS Software, chart from TradingView.com
