The NFT market has been hit pretty hard in 2022, despite peaking in transaction volume earlier in the year. Since then, volume has slumped by more than 94% as investors move away from these highly illiquid assets. But with NFT volumes picking up last month, is the NFT bull market back?
what the data says
Looking at the data from into the block, indicating that there was an increase in NFT trading volume last month, but this is not steady growth. This means that the volume has made highs and lows during this period.
At the beginning of December, daily trading volume was $33 million, and by December 29, that figure had grown to $47 million. So this represents an increase of about 42% in trading volume in his 30 days. However, if we zoom out and look at his 7-day chart, we see a more bullish move.
It hit $20 million on December 25th, up more than 100% in daily volume over the past week. This explains the renewed vigor in his NFT market this week, but it does not necessarily mean that his NFT bull market is back in full swing.
Volume grows 42% in December | Source: IntoTheBlock
It’s true that the number of NFT sales has dropped sharply in recent days, with 63,000 new sales on Thursday compared to 123,000 on Wednesday. So while dollar volumes may be increasing, investors are still not buying NFTs and the number of collections is decreasing.
NFT popularity is still declining
Like any new space, NFT’s popularity was driven primarily by new user adoption. This is why he peaked in January 2022, but has not been able to sustain this momentum. According to IntoTheBlock, the number of new addresses buying NFTs is declining.
Market declines over 60% in 2022 | Source: Crypto Total Market Cap on TradingView.com
On Thursday, December 29th, only 5,780 new addresses were using NFTs, the lowest level in nearly two years. The last time this low was in February 2021, when non-fungible tokens were still trying to establish themselves in the crypto market.
Collections in progress are also at their lowest level in a year. Only 675 new collections were made on Thursday, down to November 2021 levels. Other key metrics include the number of unique collections purchased, which was 111 during the same period.
Even more encouraging, the XRP NFT market is seeing increased adoption. on Friday, Exceeded 7.3 million XRP in total sales volume.
Featured image from APS Software, chart from TradingView.com
