Are we in the midst of an NFT market crash? – Crypto mode

• Primary versus secondary sales

• Unique buyers and sellers

To avoid an NFT market crash, at least one or two of these metrics should generate positive momentum. Unfortunately, that is not the case, as all key figures have been in a downward spiral over the past month. Not by a fraction either, as everything has dropped by at least 38% and up to 80.7%. It is not a healthy sign for the industry and it seems 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 decline in overall buying and selling activity. While it’s not unusual to see ebbs and flows on that front, the current downtrend is very telling. But from a monthly point of view, nothing is exciting, and no immediate change is expected either. Things could still turn around in the coming weeks, but that seems unlikely due to unfavorable macroeconomic conditions.

Below are a few key trends (data from NonFungible) confirming current NFT market crash outlook:

• Sales go down too almost 57% MoM, down to 15,000-ish
• The sales volume has decreased as well almost 77% to $6 million and change
• The average NFT sale price is $431, a 46.14% decline
• Primary and secondary sales volumes also decreased 80.7% and 76.53%respectively

All these trends confirm that people are less eager to buy NFTs, let alone spend significant amounts on virtual art. The average selling price of $431 is still quite high, but that decrease of almost 50% confirms the general interest. Also, it has become much more challenging for creators to sell their NFTs directly, let alone through secondary sales. The NFT industry is not in a good place right now.

Lower user activity

Making matters worse is the ongoing decline in user activity. It is measured through the number of active wallets on NFT marketplaces and the number of buyers and sellers. All three metrics have fallen sharply in the past month. The decline in active wallets is particularly worrying.

• Active market wallets also fell 56.29% to the 10k range
• Unique buyer levels are just over 6,000, a 57.1% reduce MoM
• Unique seller levels are over 5000, a 59.11% decline over a month ago

The bigger question is whether the momentum can reverse. Sizable sales across Bored Ape Yacht Club, Don’t Panic, Pudgy Penguins, CryptoPunks and Otherside continue to make headlines. But people who spend between $500,000 and $1 million are few and far between. Also, the NFT industry needs many more collections to succeed in the long term. Revisiting the same profile picture collections over and over will get old, eventually.

All signs point to an ongoing NFT market crash from a short-term perspective. Zooming out the annual performance, things don’t get any better. NFTs seem to have peaked a year ago and despite an uptrend earlier in 2022, the downtrend continues.

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