NFT volume continues to struggle as crypto cannot hold onto psychological levels. August 15th was the local high for Bitcoin. Since June 6th, the price of Bitcoin has not had a daily close above $25k.
Ethereum briefly got above $2k but couldn’t hold it. Volume on OpenSea went down again, and we are currently sitting around $15 million daily volume. Measured in ETH terms, Sunday was the lowest day for months with only 7.3k Ethereum traded. Most NFT projects are in the red and floors are still grinding lower. Let’s take a look at some of the main NFT news for the third week of August 2022.
1) NFT Market Cap and Volume
30-day volume is down 3.13%, and market capital is also down 4.59%. However, even in the worst times, the space can seem to be an unreal place to observe. If we look 12 months back, market capital is still up a whopping nearly 950%. Volume, on the other hand, is up even more – touching nearly 1,100%. These numbers are unheard of in traditional markets.
Since the downturn began in May, market volume seems to have found an equilibrium. It has pretty much flat-lined since mid-June. It has ranged between 21 and 23 billion. Again, crazy numbers for a market that is so new. Looking at August year-on-year figures, they are not so rosy. Arguably, this time last year was the peak of NFTs. We are nowhere near those highs, and it is unlikely that such volume is coming in anytime soon.
For confidence to return, we need to see volume begin to rise. This will most likely come to fruition in crypto first. Once stabilized, traders could begin to take profits and move them into NFTs. Currently, the crypto market is not seeing such volume, which reinforces the view of an upturn taking a while.
2) Even Traders Are Bored
Our next bit of NFT news focuses on traders. The Holders vs Traders chart does not make good reading. In the last seven days, there is a downturn of traders of nearly 24%. Could they all be on holiday?
Buyers are down but that is no real surprise considering the market. Sellers are also looking for liquidity, signifying an ample opportunity to buy into projects if you are willing to hold on to NFT projects long-term.
3) Bluechips Are Down
To give you context regarding market conditions, the Bored Ape Yacht Club (BAYC) NFT collection is at 79 ETH. Otherside is at 1.8 ETH, with Moonbirds at 12 ETH and Doodles at 7 ETH. These blue-chips are down 50% to 75% from their all-time high a few months ago. They are even down more measured in USD compared to ETH.
We would expect it to stay this way until a major event happens that injects new liquidity into the NFT market. The upcoming ETH merge could be such an event, bringing back attention to the whole ecosystem. With the integration of Layer 2s, increased scalability and lower fees are good for NFTs (especially on-chain play-to-earn games). Another catalyst could be a major Web3 platform like OpenSea or MetaMask releasing a token, giving the market “free money“ to play with.
4) Is It Just as Bad for Solana NFTs?
Our last bit of NFT news for the week features Solana. We already know that Ethereum transactional volume dwarfs Solana NFTs. Magic Eden’s weekly volume of nearly $33 million is not a scratch on OpenSea. It only takes two or three days to hit that figure. What is interesting is the user count.
The week-on-week Solana NFTs users seems to be growing. A 20% increase from last week is impressive, especially when market conditions are as tough as they are. From Magic Eden’s 108k user base, a 20% uplift is approximately 21,600 additional users. With cheaper NFT collections on Solana, the active user count is potentially a good metric to gauge the health of the space. However, we cannot ignore that, even in the Solana ecosystem, numbers are struggling to impress.
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