State of the Market

OpenSea weekly transaction volumes continue their contraction, falling 30% week-on-week and dipping below the $1B mark for the first time this year. This trend is not isolated to OS either; several other NFT marketplaces have seen similar drops in volume.

The drop off follows the broader uncertainty in crypto markets due to global macro instability, but it’s also a function of shifting sentiment among the NFT faithful as we continue to see a large swath of new projects come to market, many of which aren’t exactly moving the needle in terms of their designs or utility (check out our latest Market Insights for a more detailed take on the state of the market).

Median NFT sale prices took a hit in February after seeing some relief in prior weeks. From our February Chartbook:

We can observe an interesting relationship between median NFT sale price (30-day moving average) and daily NFT transfers (NFTs sent/received). There is a divergence between the two, with median NFT sale price declining as NFT transfers continue to climb to new highs. This is reminiscent of what we saw in June 2021, as indicated on the chart. The other key similarity is that the divergence comes after NFT transfers show upside continuation while breaking its previous all-time high.

As with other instances of divergence, it’s by no means a timely bottom or top signal. However, it does provide an additional layer of context to the market. In this instance, if we see median NFT sale price start to recover with daily NFT transactions still pointing north, it could mean we are looking at a similar situation like June-July 2021 playing out. On the other hand, if we see daily NFT transfers turn south in addition to further downside continuation of median NFT sale price, we could consider this observation invalidated.

The number of active users on LooksRare has been tapering off, hovering around 700 – 800 users daily. While this has come down significantly since its launch in January, one positive way to view this is that LooksRare has been able to retain a small group of users who are using its marketplace regularly; the majority of trading volume is still wash trading, ho