The recent cryptocurrency market rally has failed to lift the struggling NFT sector, which remains mired in a prolonged bear market. Prices for high-profile NFT collections like CryptoPunks and Pudgy Penguins have continued sliding lower over the past week, with floor prices dropping 4-5% despite bitcoin and other major cryptocurrencies posting strong gains of up to 22%.
The broader NFT market as measured by the Nansen NFT-500 index also remains depressed, grinding near its yearly lows set back in October 2022. Key metrics for NFT buyer demand including total address activity and new buyers are languishing around their lowest levels for 2022 as well.
This persistent weakness in the NFT market stands in stark contrast to the renewed momentum seen lately across the crypto sector, where prices for top assets like Bitcoin have rallied back near $35,000 – a level not seen in months. However, the uplift has failed to translate to NFTs so far.
There are some tentative signs the NFT market may be bottoming out after hitting rock bottom earlier this month. Overall trading volumes appear to have stabilized and ticked higher after reaching a yearly low point in early October. The number of active NFT projects with meaningful sales has also inched up slightly from 41 to 80 in recent weeks.
But despite these nascent positive developments, the NFT market remains mired in a bearish slump. The sustained weakness is especially surprising given the broad-based recovery across cryptocurrencies. For now, the NFT sector continues struggling to gain its footing even as prices rebound across the rest of the crypto ecosystem.
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