The most valuable and promising blue-chip NFTs in the market generally fell rapidly in the past week.
A bear market is coming
Recently, the Federal Reserve has raised interest rates one after another, flash crashes have occurred in LUNA and Celsius, and events such as the correlation between supervision and the stock market and securities market have led to large fluctuations in various assets in the market.
The most valuable and promising blue-chip NFTs in the market generally fell rapidly in the past week. As the NFT market is mainly priced by ETH, and its price has continued to drop close to 1,000 USDT in the past week, the valuation of NFT has also fallen at an unprecedented rate. In the bear market series, we will analyze the market from the performance of blue-chip NFTs, who is buying the bottom, the correlation of the crypto market, and the tracking of giant whales. In Series #1, we’ll look at:
- Which blue-chip NFTs are more resilient?
- How much did investors lose after buying millions of dollars in NFTs at the peak of the cycle?
- Correlation of blue-chip NFTs and ETH with BTC broader market trends
We let the data speak and explore the hidden trends of the NFT market through a multi-dimensional perspective.
Coping with the slump
In the past year, the NFT market has experienced an unprecedented bull market cycle. But the development of NFTs is still in the early stage, and there is still the potential to return to all-time highs again, or even exceed all-time highs.
To assess the performance of NFTs in the current bear market cycle, we have listed three data phases that can reflect market sentiment.
1- April 2022: The bear market cycle in cryptocurrencies continues, with prices continuing to fall, still referred to by some analysts as Crab Market (volatility, but no significant up or down market). The Russian-Ukrainian war and the Federal Reserve are the main factors affecting the price of cryptocurrencies.
2- May 2022: The bear market cycle of cryptocurrencies is accelerated due to the flash crash of the LUNA coin price.
3- Current stage: Going through the biggest bear market in the first half of 2022, the price fell sharply and some holders started to liquidate their assets.
Cooling market sentiment has greatly affected the average price of NFTs. Some blue-chip NFTs have reached their peak valuations in the most frenetic phase before. Since then, these valuations have continued to plummet, falling into a cooling cycle.
The chart below shows the change in the average price of NFTs in USD from April to May 2022 and compares it with the current average price in USD. It can be seen that the decline in the NFT market is still continuing. From the first market crash in early May, when UST de-pegged, LUNA prices plummeted, and the Fed warned that inflation would soar, to the current bear market phase that began in early June.
The table below shows the decline in NFT prices under the shock of the cryptocurrency market. While some NFTs are more resilient than others, the general trend is still down. Holders are willing to incur losses ranging from 46% to 27% in order to sell their blue-chip NFTs. On average, blue-chip NFT holders lost 40% more money selling in June than they did in April. The graph below shows the drop in average selling price for different NFT projects from April to June.
High-priced NFTs traded at a loss
In terms of transaction volume in the NFT market, blue-chip NFTs have always had the main advantage, and now some blue-chip NFTs are already being traded at loss prices. The real-time ranking of NFTGo high-priced transactions reflects the most expensive NFT transactions within a period of time. The figure below shows the distribution of NFT categories in the weekly sales rankings.
It can be seen that BAYC has the largest proportion in the NFT trading list. Over 85% of all high-priced transactions in the past week have come from BAYC. After BAYC is CryptoPunks, which accounts for about 3% of the total. BAYC’s dominance is both bearish and bullish on its own.
We found investors trying to buy BAYC in a bear market. At a time when the buying volume of other projects is relatively quiet, BAYC still dominates the real-time ranking of high-priced NFT transactions.
But the question that comes with it is at what cost are these holders selling the high-priced blue-chip NFTs. We first looked at the average profit and loss of the top 200 trades traded over the past week. To further illustrate the impact of falling ETH prices on market valuations, we have drawn up a profit and loss statement (PnL) denominated in ETH and USD, calculated by subtracting the ask price from the bid price.
The data shows that while average profits in ETH are high, dollar-denominated profits are either negative or minimal relative to ETH’s generally positive returns. And this is a troubling signal for all NFT holders, as this situation means some holders would even be willing to incur additional dollar losses in order to clean up their NFT holdings, while “panic selling” is generally a cold winter. One of the major signals to come.
Blue Chip NFT VS ETH
The USD price of many blue-chip NFTs has fallen in tandem with the price of ETH. As shown in the table below, the average selling price of both ETH and USD-denominated NFTs saw a significant drop.
Average ETH and USD prices of high-value NFTs over the past week (Source: NFTGo.io)
The number of active whales in the past month and the blue-chip NFT index show that whales are slowing down NFT trading activity. Whales are the most capitalized players in the NFT market, and they are the main force driving market liquidity and most large-scale trading activity. When the number of active whales began to shrink, the NFT market also began to drop. The chart below illustrates the trend of the blue chip NFT index and the number of active whales.
Number of active whales and blue chip NFT index in the past month (Source: NFTGo.io)
As ETH is also depreciating against the US dollar, the market performance of the blue-chip NFT index ETH was weaker than that of the US dollar.
ETH-denominated and USD-denominated blue-chip NFT indices over the past week (Source: NFTGo.io)
Blue Chip NFTs vs BTC
We convert some blue-chip NFTs into USD units and compare them with the recent trend of BTC.
BAYC VS BTC (USD Standard) (Source: NFTGo.io)
From March 27th to May 1st, in the process of BTC’s gradual decline, the trend of blue-chip NFTs is mainly divided into two categories. NFTs represented by BAYC and Azuki did not follow its trend, but started independent market. Some NFTs even continued to rise, such as: BAYC rose 9%, Meebits rose 29%, Azuki rose 54% (in USD), and the rest For example, Cool Cats and CloneX are following the trend of BTC.
After May 1, most of the blue-chip NFTs began to decline more than BTC, and the above-mentioned NFTs in the independent market began to make up for the decline. From May 1st to May 10th, BTC fell by -19%, while BAYC fell by -42%, CloneX fell by -32%, Meebits fell by -43%, Azuki fell by -78%, Cool Cats fell was -39%.
Most of the blue chips started following BTC during the latest period of decline, and the decline has been amplified. Since June 5th, BTC has dropped by -25%, BAYC has dropped by -49%, CloneX has dropped by -57%, Meebits has dropped by -54%, and Azuki has dropped by -49%.
Some Blue Chip NFTs VS BTC (USD Standard) (Source: NFTGo.io)
From this point of view, the dollar-standard blue-chip NFTs have two interesting characteristics in this round of bear market. One is that some blue-chip NFTs will come out of the independent market to fight against the trend of the broader market, but will accelerate their decline later. Second, some recent blue-chip NFTs have begun to follow BTC. trend, and amplify the decline.
The future of blue-chip NFTs
Blue-chip NFTs are some of the most valuable collectibles in the NFT ecosystem. If you are not ready to invest in blue-chip NFTs, it is also necessary to pay attention to the dynamics of these projects. Our data shows that the blue-chip NFT index is closely related to the total NFT market capitalization.
The blue chip index records the value of these NFT projects, and the NFT market capitalization represents the total value of the NFT ecosystem. The chart below shows that these two metrics overlap significantly.
This article describes how blue-chip NFTs have been affected by the bear market in the cryptocurrency market. The NFT market is one of the most promising new industries, and the blue-chip NFTs among them have a lot of room for growth in the future. In addition to the hype cycle and bubbles currently experienced, NFTs still have a long way to go to fully demonstrate their value in the market.
We have been researching the latest developments in the NFT market and following the latest trends. This is the first article in our series of bear market analysis reports, so stay tuned. At the same time, you can monitor the latest data of the NFT market in real time on the NFTGo website.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/bear-market-topic-blue-chip-nft-trend-in-the-current-market/
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