The global Non-Fungible Token (NFT) market has experienced a notable 22.5% decrease in trading volumes, marking a consistent downturn in the third week of January, according to data from CryptoSlam.io. Despite this overall decline, the number of active participants surged by 34%, reaching over 734,000 collectors engaged in NFT purchases across various platforms during the past week.
However, the increase in activity is accompanied by concerns about wash trading, particularly prevalent across Solana and Avalanche collections. Wash trading involves simultaneous buying and selling of the same NFT to create misleading market activity. The high levels of wash trading on these networks suggest potential artificial inflation of market activity.
In terms of specific collections, Bitcoin Ordinals faced a substantial 35% decline in sales in January. Ethereum and Solana-based NFTs also experienced significant drops. In contrast, Polygon-based NFTs saw a remarkable 70% increase in sales, with the Trump Digital Trading Cards Series 2 collection witnessing a 25% rise in floor price, potentially fueled by the ongoing U.S. election season and Trump’s campaign.
Despite the overall market challenges, Polygon and Avalanche-based collections are showing remarkable growth, suggesting a shift in user interest towards less mainstream networks. The NFT market, while experiencing fluctuations, seems to be diversifying rather than strictly contracting.
Ethereum-based collections, including popular ones like CryptoPunks and Bored Ape Yacht Club (BAYC), have faced declines in recent weeks, with both witnessing an almost 8% drop in floor prices. The market, which had previously recovered from a downtrend in Q4 2023, is now navigating another bearish phase, emphasizing the dynamic nature of the NFT business and the importance of monitoring emerging trends in the space.
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