NFTs
Ethereum NFT market faces decline: any impact on ETH?
- Interest in Ethereum NFTs has declined materially as sales have plummeted over the past month.
- The price of ETH remained stable, but network growth continued to slow.
Although the price movement of Ethereum [ETH] was in a positive direction over the past few days, the Ethereum ecosystem was facing some major issues.
NFT volumes start to fall
Last month, total sales of Ethereum NFTs fell by 55%. Popular Ethereum NFT collections such as BAYC (Bored Ape Yacht Club), MAYC (Mutant Ape Yacht Club), and Crypto Punks have witnessed a significant decline of over 40% in terms of sales and price floors.
NFTs on other networks such as Solana and Bitcoin were gaining traction compared to the Ethereum network.
Source: Crypto Slam
Furthermore, daily active addresses on the Ethereum network have also dropped significantly in recent days, along with gas usage on the network, implying the decline in overall activity in the Ethereum ecosystem.
This is perhaps a sign that Ethereum’s popularity as an ecosystem was declining significantly.
While interest in ETH due to the excitement surrounding its ETF has increased and caused the price to rise, a decreasing interest in Ethereum ETFs could cause a problem for ETH in the long run.
Source: Santíment
At press time, ETH was trading at $3,786.76 and its price had fallen by 0.68%. Network growth around the ETH token has dropped significantly, implying that the number of new interesting addresses holding ETH has drastically decreased.
The lack of interest from new addresses suggested that the market was not ready to buy ETH at the current price.
Some bulls may wait for a correction before accumulating more ETH in the future.
Furthermore, the speed at which ETH was being traded increased, indicating that the frequency at which ETH was being traded had increased.
Only time will tell if ETH’s price action is related to the increasing velocity, giving bulls some hope about the future.
Source: Santíment
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How are the addresses?
Coming to the status of the holders, it was found that most of the addresses were profitable, as indicated by ETH’s high MVRV ratio.
While a high MVRV ratio means that more holders are incentivized to sell their holdings, the presence of long-term holders evidenced by the high Long/Short difference implies that a large sale may not happen anytime soon.
Source: Santíment