Market conditions have been challenging over the last several months, with the NFT market showing a slow trend in terms buyers.
The number of unique non-fungible purchases fell below 800,000, snapping a three-month trend, in what data aggregator CryptoSlam refers to as a “mini-bear market.”
According to CryptoSlam data, the number of unique NFT buyers decreased by 13% in February from the previous month’s record. Since October, buyers have not been below 800,000.
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During a bear market, an asset’s price drops for an extended period of time A bear market or bear market correction has occurred when stock prices have declined by at least 25% from recent highs.
February also experienced a 40% fall in sales volume from the previous month’s US$4.4 billion, which fell just shy of August’s record US$4.5 billion.
NFT Market put to the test
Many NFT investors hope that the new digital asset class will prove its value to them in light of uncertainty in global markets due to the ongoing Ukraine conflict. This is similar to what bitcoin demonstrated during the market crash in March 2020.
The decline in NFT trading volumes has caused a decrease in the sales volume of NFT-service providers. CryptoSlam reports that only two of the twelve networks experienced growth within the last 24 hours.
Source: TradingView.com| Source: TradingView.com
Arbitrum and Flow each gained 538 % and 20 %, respectively. Rest of the market including Avalanche and BSC as well as Solana, Ethereum, Cronos, and Solana posted losses.
“Historically, bear markets in NFT have been brief, and with the 70x increase in NFT sales since November 2020, a cooling off is expected,” CryptoSlam chief marketing officer Yohann Calpu told Forkast.
Is there a pullback?
NFT Space is made up of crypto-community members who are eager to share their knowledge and gain benefits.
“A lot of it is support for the artists’ experiences, or someone has sold some work and done fairly well, and they want to give back to the community and ecosystem,” KnownOrigin Labs Chief Executive Officer and Co-Founder David Moore explains.
The decline in trade volume does not necessarily indicate that there is cause to be concerned. Given NFT’s strong performance in January, experts say a pullback is only natural.
Even though there are reasons to feel jittery for people who invested heavily in this asset class due to the drop in NFTs interest, there is no reason not be, especially for those that have made large investments in it.
Google trends shows that NFT search volume has also decreased. In comparison to late January’s peaks, the search volume for NFT decreased by 60–70%.
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Featured image taken from Artnet News. Chart by TradingView.com