As cryptocurrencies continue to depreciate, 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 quality sales, all key metrics have declined significantly over the past month.
The NFT Market Crash Outlook
It’s not too difficult to understand why people think the current status quo is part of a broader NFT market crash. There’s no shortage of new projects landing on OpenSea or other marketplaces, but there seems to be little excitement. Some high-quality projects continue to post strong and sizeable sales, but that doesn’t hide the overall downtrend in this industry.
One can analyze the “health” of the NFT market based on several crucial metrics:
- Primary vs Secondary Selling
- Unique buyers and sellers
To avoid a NFT market crash, at least one or two of these metrics should show positive momentum. Unfortunately, that’s not the case as all the key metrics have been in a downward spiral for the past month. Not even by a small fraction, as everything has shrunk by at least 38% and as much as 80.7%. This is not a healthy sign for the industry and it appears 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 drop in overall buying and selling activity. While it is not uncommon to see ebb and flow on this front, the current downtrend is very clear. Nothing exciting from a monthly perspective, however, and no immediate change is expected either. There may still be a reversal in the coming weeks, but this seems unlikely given the unfavorable macroeconomic conditions.
Below are a few key trends (Data from NonFungible) confirming the current NFT market crash outlook:
- Sales are declining almost 57% MoM, down to about 15,000
- The sales volume has decreased by almost 77% to $6 million and change
- Average NFT selling price is $431, a 46.14% Waste
- Primary and secondary sales volumes decreased by 80.7% and 76.53%respectively
All of these trends confirm that people are less keen on buying NFTs, let alone spending significant sums on virtual art. The average selling price of $431 is still pretty steep, but this nearly 50% month-over-month drop confirms that general interest is waning. Additionally, it has become much more difficult for developers to sell their NFTs outright, let alone secondary sales. The NFT industry is not in a good place right now.
Lower user activity
To make matters worse, user activity is steadily declining. This is measured by the number of active wallets on NFT marketplaces and the number of buyers and sellers. All three metrics have fallen sharply over the past month. Of particular concern is the decline in active wallets.
- Active market wallets decreased by 56.29% up to the 10k range
- Unique buyer levels are slightly above 6,000, a 57.1% Decrease MoM
- Unique seller levels are over 5,000, a 59.11% decline over a month ago
The bigger question is whether the momentum can reverse. Pretty big sales at Bored Ape Yacht Club, Don’t Panic, Pudgy Penguins, CryptoPunks and Otherside continue to make headlines. However, there are few people who spend between $500,000 and $1 million. In addition, the NFT industry needs many more collections to be successful in the long term. Rehashing the same profile picture collections over and over again gets old.
From a short-term perspective, all signs point to an ongoing NFT market crash. If you zoom out on the annual performance, it doesn’t get any better. It appears that NFTs peaked about a year ago and are continuing their downtrend despite an uptrend in early 2022.
CryptoMode produces high quality content for cryptocurrency companies. We’ve brought brand awareness to dozens of companies so far, and you can be one of them. All of our customers value our value for money. Contact us if you have any questions: [email protected]
None of the information on this website constitutes investment or financial advice. CryptoMode is not responsible for any financial loss caused by actions taken based on information provided on this website by its authors or clients. Reviews should not be taken at face value. Always do your research before making any financial commitments.