NFT Market in a Slump; Lack of Demand Concerns Sellers

The NFT market has seen a persistent surplus of sellers compared to buyers throughout the month of April, according to data from analytics platform NFTGo. On April 26th, 8,641 sellers were recorded, compared to 7,907 buyers.

This trend is concerning for sellers as there has not been a single day in April when the number of buyers surpassed the number of sellers, signaling a potential lack of demand. The last recorded day where buyers exceeded sellers was March 11.

The NFT market experienced a downturn in March following the collapse of Silicon Valley Bank, which instilled fear among traders and could be the cause behind a 27.9% decrease in daily NFT sales count. Wash trading in the top six NFT marketplaces saw a rise in February, reaching a total volume of $580 million. This increase was attributed to the overall recovery of the NFT marketplace.

According to data from Dune, sales, volume, and unique users are all crucial measures for NFTs, and they’re all at annual lows, prompting speculation about the root cause. Since July 2021, the total number of NFTs sold across all marketplaces has dropped to 9,887.

The count of unique users is also at a yearly low, with NFT platforms recording 4,265 unique users. NFT trading volume across major marketplaces is down to 5,823 Ethereum (ETH), with the average sales size dropping to around 18.7 ETH.

The dropping numbers have prompted discussions within the community, with potential causes including the popularity of meme coins, tax season, and a sharp increase in Ethereum gas fees. According to Ovie Faruq, the co-founder of Canary Labs, “The NFT market is not functioning at the moment.”