It has been roughly one week since the Ethereum Merge. The historic shift from proof-of-work to proof-of-stake is now behind us. But what does it mean for NFTs? The price of Ethereum fell, and currently, it looks to have stabilized. A steady Ethereum price is usually good for NFTs.
Now let’s examine the impact of The Merge on the NFT ecosystem.
The large Ethereum holders were aggressively redistributing their holdings on the market. This may have been the main culprit of the overwhelming selling pressure. The selling of Ethereum have driven ETH’s price to the levels of July. The already-falling price plunged 10% after the merger. Since then, it has subsequently declined more than 20%.
From a technical perspective, Ethereum has fallen below the 50-day Moving Average and is no longer in an uptrend. The sustained trading volume indicates that the trend is still strong. A decline into new lows is possible, especially if the cryptocurrency market does not show signs of recovery soon.
NFT Market Cap & Volume
While the price of Ethereum and other digital assets are down, it’s a different story for NFTs. The number of sales this week increased by 15% to 28K while sales in USD terms increased by a whopping 33% to $15 million.
The market cap slightly increased by 2.50%, a small increase from the week before. The seven-day market volume, on the other hand, had a significant increase of 29.18%. The market cap and volume of the blue-chip NFT collections, like Bored Ape Yacht Club, Meebits, and Mutant Ape Yacht Club, seem to have considerably increased. That said, there was a significant fall in volume across all the major NFT marketplaces. While OpenSea saw a 13.22% decline in volume, Magic Eden saw a decline of 18.29%.
Holders and Traders
The overall trading activity in the NFT space seems to be on a downtrend this week. The holders are becoming more prevalent, while the traders are on the decline. It’s clear from looking at the bigger picture that the majority of the metrics have been noticeably declining in value. This indicates that the bear market is still going strong, which is a bad omen for the market.
Solana-based NFT marketplaces are seeing booming sales volumes compared to the wider NFT sector (which is down roughly 80% year-to-date). That said, this week has been a tough week for these marketplaces as well. Magic Eden, the dominant Solana-based NFT marketplace, witnessed a substantial drop in the volume and number of traders. The rest of the marketplaces have been hit even more severely.
With Ethereum gas fees after the merger remaining similar, the Solana NFTs still have an extra edge on the minting fees. So the present decline in the metrics might be a micro trend and we can still expect more user adoption in the Solana NFT space.
Quickfire NFT News Roundup
- Web3cConsole in the making by Zilliqa anticipating a 2023 launch.
- The underwhelming graphics of the metaverse are done on purpose, mainly for accessibility for creators of all ages.
- Creators will be able to host NFT drops directly through the homepage of OpenSea.
- BNV World, a metaverse focused exclusively on fashion, will address a variety of problems.
⬆️Moreover, for more cryptocurrency news, check out the Altcoin Buzz YouTube channel.
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