The State of NFTs in Volatile Markets

In the past 30 days, NFTs have seen their total volume drop more than 50%, from $57.5 billion on May 1 to $27.35 billion today.

Market Volatility

The crypto markets are currently bearish as TVL is being wiped out in large quantities across several protocols. As for the NFT market, some projects saw their volumes decline while others saw a significant increase in their users and, therefore, a rise in the TVL.

Cryptocurrency markets are volatile and fluctuate on a daily basis; these terms refer to more extended periods of mostly upward or downward movement. As soon as the market is informed about unfavorable conditions on a particular cryptocurrency or stock, prices typically drop. In a downward spiral, more people hold off on investments due to a perception that there will be more bad news soon and that they should prepare for the worst. 

Source: More than 40 billion in TVL was wiped out within a week during the recent market crash.

Bear markets can be triggered by wars, political crises, pandemics, and weak economies, among other things. A bear market in crypto is, however, much more challenging to predict by looking at previous trends. 

The Case for Non-Fungible Tokens

Non-fungible tokens are a newer addition to the crypto arena, and their craze swept the cryptocurrency industry by storm throughout 2021, during a rapidly growing period of growth and adoption. However, the majority of the projects launched in 2021 have fallen into their very own bear markets, suffering from low liquidity and low volumes, as well as low ‘floor prices.’ 

The current market has brought a decline in NFT prices as the United States Federal Reserve raised interest rates and Terra’s LUNA platform collapsed, and traders realized that the entire industry was in a slump. 

Source: 30 days NFT market capitalization/volume

Based on data provided by NFTGO, NFTs saw their total volume fall more than 50% in the past 30 days, from $57.5 billion on May 1 to $27.35 billion at the time of writing. We can see more drastic changes if we look at OpenSea’s analytics.

Source: OpenSea analytics show a massive change in volume.

While the number of OpenSea users increased over the last month, the volume decreased from 86.39 million on April 30 to 23.74 million at the time of writing. On top of that, Morgan Stanley predicts a further NFT crash, as reported by Will Canny from CoinDesk.  

NFTs, according to Morgan Stanley, will follow the UST route to crash since they are the next most leveraged and speculative sector. Further, according to the report, most of the NFTs owned by ‘HODLers’ are for reselling at a higher price. BSC News reached out to the crypto influencer and founder of NFT Lounge, Dehuffski, to get his opinion on the current state of the market. Here are his thoughts: 

“I think the recent events have been a real knock to the crypto community- Regards to the Luna fiasco, I feel that there were things happening behind the scenes that led up to that point. It’s tragic what’s happened to countless people’s investments; this is a volatile market which is constantly evolving and changing… hopefully, more information will be made clear in the coming days and weeks.”

Building Long-term NFT Communities

Despite all this, there is some good news: Magic Eden is reportedly soaring with increased users and a large increase in volume. According to DappRadar, there has been an increase of 18.54% in users and a massive rise of 76.97% in volume over the last 30 days. In addition, there have been 2.4 million transactions over the previous seven days on Magic Eden, indicating that users are increasingly interested in NFTs based on Solana. 

According to Li Jin, co-founder of Variant Fund and Atelier Ventures, Magic Eden has held its market share despite volatile market conditions by building community, verticalizing features, and promoting discoverability.

Over the last 30 days, Magic Eden’s most popular NFTs, such as Okay Bears and DeGods, have shown a significant increase in volume. In addition, on the Binance NFT marketplace, StepN X ASICS NFT Sneakers and PixelSweeper NFTs have shown a substantial rise in volume, as the newly launched latter has held its floor price despite the

Though many investors still view NFTs as the Wild West, they are learning that everyone’s barometer for morality and ethics differs. Dehuffski further shared with BSC News

“It’s imperative that Community leaders now take the time to check in with their community members who may have been effected. Remember, This will pass. Times like these remind us that nothing is guaranteed or promised, but we have the opportunity to adapt and overcome these obstacles. Engage with your community, educate them, and most importantly reassure the people on How your project intends on keeping holders safe.”

The importance of building an NFT crypto community from the very beginning cannot be overstated. As well as setting the foundation for a successful NFTs sale, a strong community can also generate buzz that attracts buy-in and increase your profile traffic. You can establish strong relationships within the blockchain ecosystem with the community approach. 

The Light at the End

In the end, not everything is negative in a bear market, as the data from NFTGO demonstrates a decrease in traders but a steady increase in holders. 

Source: NFT holders and Traders’ data over the last 30 days.

Investors seem to understand that hodling can provide more safety because they are not exposed to short-term volatility and are not at risk of buying high and selling low. 

It seems that the WAGMI mantra of “we’re all gonna make it” that grew popular among NFT investors is being tested, and traders have to contend with market cycles that do not include all-time highs and massive volumes. It is often during these times that builders emerge from the ashes. Experienced investors take advantage of the current low market prices to ride the market to new highs by adding to their portfolios.

‍What is OpenSea:

OpenSea describes itself as the world’s first and largest digital marketplace for crypto collectibles and NFTs. The marketplace offers some of the most exclusive collections in the NFT space. Users can buy, sell, and discover exclusive digital items through OpenSea.

Where to find OpenSea:

Website | Twitter

What is Magic Eden:

Magic Eden is the leading NFT platform on the Solana blockchain. It facilitates the buying, selling, and minting of NFTs and holds over 90% market share for secondary trading volume on the Solana.

Where to find Magic Eden:

Website | Twitter

‍Source :

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