The NFT market has suffered a major blow over the last month, with its market capitalization plunging 45%.
CoinGecko data shows the market fell from $6.6 billion on October 5 to $3.5 billion on November 5.
Despite the enormous decrease in market value, in October, NFT trading activity increased. According to CryptoSlam, the sales volume in October reached $631 million.
This represents a 13% increase from the previous month’s volume of $556 million. Base NFTs and Bitcoin both experienced significant growth, with increases of 24% and 9%, respectively.
NFT market faces steep declines despite isolated gains
On the other hand, there were several major platforms that declined dramatically. BNB Chain tanked 82%, and Polygon tanked 86%. The largest NFT network by sales volume, Ethereum, dropped 25.5% in the last 30 days.
Other coin exchanges, such as Solana, Immutable, and Avalanche, followed the losses with losses between 31% and 35%. Even blue-chip NFT portfolios were affected by the downturn.
Trading volume of the highly regarded crypto collection CryptoPunks declined by 40%. Its floor price dropped from $214,000 on October 5 to $117,000 on November 5. Moonbirds, for instance, had a 63% reduction in volume, and its floor price fell in half from $14,700 to $6,500.
Some collections, such as Bored Ape Yacht Club (BAYC) and Pudgy Penguins, experienced growth in trading volume. BAYC’s volume increased by 30%, while Pudgy Penguins’ volume increased by 83%.
Market volatility and shifting dynamics in the NFT sector
However, although their prices increased, their floor prices decreased by a considerable amount. Pudgy Penguins decreased from $43,000 to $18,340, and BAYC dropped from $36,700 to $19,500.
The lack of a correlation between an increasing trading volume and a decrease in the price highlights the speculative and volatile nature of the NFT market. Liquidity is still a delicate situation, and the market is still largely driven by general crypto sentiment.
Key players are adjusting their strategies for the slowdown in the market. OpenSea, the largest NFT marketplace, has announced plans to become a universal on-chain trading hub. However, it denied the allegations of deviating from NFTs.
Meanwhile, Animoca Brands has announced its intention to go public on Nasdaq, demonstrating the growing acceptance of Web3 gaming and metaverse companies in traditional capital markets.
While the future of the NFT market remains uncertain, with liquidity and investor sentiment posing ongoing challenges, it is clear that the market is still in its early stages and has a long way to go before it reaches its true potential.