Recently, the Federal Reserve has raised interest rates one after another, Luna and Celsius have collapsed one after another, and events such as the relevance of regulation to the stock market and securities market have led to sharp fluctuations in various assets in the market.
The most valuable and potential blue chip NFT widely recognized by the market fell rapidly in the past week. As the NFT market is mainly priced by eth, and its price has continued to drop by nearly 1000 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 aspects of blue chip NFT performance, who is bargain hunting, encryption market relevance, and whale tracking. In series \1, we will focus on:
Which blue chip NFTs are more resistant to decline?
How many losses did investors suffer after buying millions of dollars of NFT at the peak of the cycle?
Correlation between blue chip NFT, Eth and BTC market trend
We let data speak and explore the hidden trend of NFT market from a multi-dimensional perspective.
In the past year, the NFT market has experienced an unprecedented bull market cycle. However, the development of NFT is still in its early stage, and it still has the potential to return to or even exceed the historical highs.
In order to evaluate the performance of NFT in the current bear market cycle, we have listed three data stages that can reflect market sentiment.
1 - April 2022: the bear market cycle of cryptocurrency continues, and the price continues to decline. Some analysts still call it the crab market (fluctuating, but not significantly rising or falling). The war between Russia and Ukraine and the Federal Reserve are the main factors affecting the price of cryptocurrency.
2 - may 2022: due to the sudden collapse of Luna currency price, the bear market cycle of cryptocurrency is accelerated.
3- current stage: it is experiencing the biggest bear market in the first half of 2022, with prices falling sharply, and some holders begin to clean up their assets.
The cooling market sentiment greatly affected the average price of NFT. Previously, in the most frenzied stage, the valuation of some blue chip NFTs reached the highest point. Since then, these valuations have continued to plummet, falling into a cooling off cycle.
The following figure shows the change of NFT average dollar price from April to may 2022 and compares it with the current average dollar price. It can be seen that the decline in the NFT market continues. From the first market collapse in early May, when ust broke off its anchor and Luna prices plummeted, the Federal Reserve warned that inflation would soar, to the current bear market beginning in early June.
The following table shows the decline of NFT price under the impact of cryptocurrency market. Although some NFTs are more defensive than others, the overall trend is still downward. Holders are willing to bear losses ranging from 46% to 27% in order to sell their blue chip NFT. On average, blue chip NFT holders lost 40% more in June than in April. The figure below shows the decrease in the average selling price of different NFT projects from April to June.
High NFT for loss Trading
In terms of the trading volume in the NFT market, blue chip NFTs have always had major advantages, and now some blue chip NFTs have been traded at a loss price. The nftgo high price transaction real-time ranking reflects the NFT with the most expensive transaction in a period of time. The following figure shows the distribution of NFT categories in the weekly sales leaderboard.
It can be seen that bayc accounts for the largest proportion in the NFT trading list. In the past week, more than 85% of high priced transactions came from bayc. Next to bayc is cryptopunks, accounting for about 3% of the total. Bayc's dominance is both bearish and bullish for itself.
We found that investors were trying to buy bayc in the bear market. When the buying volume of other projects is relatively quiet, bayc still dominates the real-time ranking of NFT high price transactions.
But the question that follows is, what is the price for these holders to sell high priced blue chip NFT. We first studied the average profits and losses of the top 200 transactions in the past week. In order to further explain the impact of eth price decline on market valuation, we have also drawn a profit and loss statement (PNL) denominated in Eth and US dollars, which is calculated by subtracting the selling price from the buying price.
The data shows that although the average profit in eth is very high, the profit in USD is either negative or very small compared with the general positive return of eth. This is a disturbing signal for all NFT holders, because this situation means that some holders even prefer to bear additional dollar losses in order to clean up their NFT assets, and "panic selling" is generally one of the main signals that the cold winter is coming.
The dollar prices of many blue chip NFTs have fallen along with the ETH prices. As shown in the table below, the average selling price of both Eth and USD denominated NFTs decreased significantly.
Eth average price and USD average price of high-value NFT in the past week (source: nftgo.io)
The number of active megawhales and blue chip NFT index in the past month show that megawhales are slowing down NFT trading activities. Jujing is the most capitalized player in the NFT market. They are the main force driving market liquidity and most large-scale trading activities. When the number of active giant whales began to shrink, the NFT market also began to dip. The following figure illustrates the trend of the blue chip NFT index and the number of active giant whales.
Number of active megawhales 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 once weaker than that of the US dollar.
Eth denominated and USD denominated blue chip NFT index in the past week (source: nftgo.io)
We convert some blue chip NFTs into US dollars and compare the trend with the recent BTC.
Bayc vs BTC (USD standard) (source: nftgo.io)
From March 27 to May 1, during the gradual decline of BTC, the trend of blue chip NFT is mainly divided into two categories. NFT represented by bayc and azuki did not follow the trend, but started an independent market. Some NFTs even continued to rise, such as bayc rose by 9%, meebits rose by 29%, azuki rose by 54% (in USD). The rest, such as cool cats and CLONEX, followed the trend of BTC and fell.
After May 1, most blue chip NFTs began to decline more than BTC, and NFTs of the above independent markets began to make up for the decline. From May 1 to May 10, BTC fell by - 19%, while bayc fell by - 42%, CLONEX by - 32%, meebits by - 43%, azuki by - 78% and cool cats by - 39%.
In the recent decline, most blue chips began to follow the trend of BTC and amplified the decline. Since June 5, BTC has fallen by - 25%, bayc by - 49%, CLONEX by - 57%, meebits by - 54% and azuki by - 49%.
Some blue chip NFT vs BTC (USD standard) (source: nftgo.io)
From this point of view, the dollar based blue chip NFT has two interesting features in this bear market. One is that some blue chips will go out of the independent market to fight against the market trend, but will accelerate the decline later. The other is that some recent blue chip NFTs began to follow the trend of BTC and amplified the decline.
The future of blue chip NFT
Blue chip NFTs are some of the most valuable collections in the NFT ecosystem. If you are not ready to invest in blue chip NFT, it is also very necessary to pay attention to the dynamics of these projects. Our data show that the blue chip NFT index is closely related to the total market value of NFT.
The blue chip index records the value of these NFT projects, and the NFT market value represents the total value of the NFT ecosystem. The figure below shows that the two indicators overlap obviously.
This paper introduces how the blue chip NFT is affected by the bear market in the cryptocurrency market. NFT market is one of the most promising new industries, among which the blue chip NFT has great room for growth in the future. In addition to the Current hype cycle and foam, NFT still has a long way to go to fully demonstrate its value in the market.
We have been studying the latest trends of NFT market and paying attention to the latest trends. This is the first article in our series of bear market analysis reports. We welcome continued attention. At the same time, you can monitor the latest NFT market data in real time on the nftgo website.