The global NFT market has experienced a decrease in trading volumes, marking a continuous decline for the third week of January. According to the latest data from CryptoSlam.io, a leading on-chain data aggregator, the trading sales volume in the NFT sector dropped to $223 million in the past week, representing a significant 22.5% decrease from the previous week.
On the contrary, there has been an increase in the number of active participants in the NFT market. Recent data reveals that over 734,000 collectors engaged in NFT purchases across various platforms last week, showing a 34% surge in interest in non-fungible tokens despite the overall drop in trading volume.
However, there has been a noticeable increase in wash trading, particularly in Solana and Avalanche collections. Wash trading, a form of market manipulation where an investor trades the same NFT to create artificial activity, has been prevalent in these collections. This suggests that a significant portion of transactions in these networks may be artificial, distorting genuine economic indicators.
Bitcoin Ordinals collections experienced a significant decline in January, with sales dropping by almost 35%. Ethereum and Solana-based NFTs also saw a decrease in sales. In contrast, Polygon-based NFTs saw a massive 70% increase in sales this month, with the Trump Digital Trading Cards Series 2 collection witnessing a 25% rise in floor price, likely due to the buzz around the current U.S. election season and Trump’s campaign.
Meanwhile, popular Ethereum-based collections saw a decline in the past few weeks, with the floor price of CryptoPunks and BAYC dropping by nearly 8% in the last two weeks.
Although the market had shown signs of recovery in Q4 2023, it seems to be entering a bearish phase again, indicating a shift in user interest towards less popular networks like Polygon and Avalanche-based collections, which have seen significant growth this month. It appears that the NFT industry is evolving and diversifying rather than shrinking.