Cryptocurrency Trading Volume and NFT Sales Dropped More Than 30% in April
The cryptocurrency and NFT market plummeted 30% in April. Binance leads with a trading volume of $699.25 billion. Bitcoin Puppets and WZRDs defy market crash.
In April, the crypto and non-fungible token (NFT) markets experienced significant declines, indicating a cooling period in digital asset transactions.
As trading activities slowed, key players and cryptocurrency platforms faced a sharp decline in transaction metrics. This change indicates a recalibration of cryptocurrency market dynamics, reflecting investor caution and a reassessment of the value of the assets.
Why Did Cryptocurrency Trading Volume and NFT Sales Fall?
Data from centralized exchanges (CEX) revealed a substantial decline in spot trading volumes. These have plummeted 35.7%, from 2.49 trillion dollars in March to only 1.6 trillion. Binance, the largest operator in the sector, accounted for 43.7% of this volume, which translates to approximately $699.25 billion.
At the same time, the NFT sector also experienced a decline. NFT sales fell to $1.15 billion in April, down 31.26% from the previous month.
The decline was not limited to sales alone. In fact, the number of NFT buyers and sellers also decreased substantially. Buyer participation fell by more than half, to 51.88%, and seller activity was reduced by 45.72%, indicating declining market interest.
The global crypto market capitalization has fallen by more than $20 billion, highlighted by the outflow of $540 million from US Bitcoin spot ETFs since April 20.
According to 10x Research, the average entry price for US Bitcoin ETF holders is approximately $57,300, which may serve as a critical support point if the downtrend continues.
“There may have been many ‘TradeFi’ tourists in crypto, pushing long positions until the halving, this time is already over. We expect more easing as the average Bitcoin ETF buyer will be at a loss when Bitcoin trades below $57,300. This will likely bring prices down to our target levels and cause a -25% to -29% correction from the high of $73,000; hence our price target of $52,000 to $55,000 over the past three weeks,” wrote Markus Thielen, CEO of 10x.
Which Blockchains Were Most Affected?
The decline affected several blockchains where non-fungible tokens are commonly traded. Ethereum and Solana, for example, saw their NFT sales decline dramatically. Ethereum NFT transactions halved, down 56.8%, while Solana saw sales drop 39.4%.
This trend was constant across different blockchains. However, only a few exceptions, such as Immutable X and Avalanche, saw surprising increases in NFT transactions.
“Declining NFT sales and participation across blockchain platforms could stifle innovation in the space as the market shifts from speculative to pragmatic value. Creators and platforms should prioritize real-world use cases such as ownership certificates, digital identities, and gaming assets with significant in-game utility, ensuring transfer fees are a fraction of the price of the game. active,” asserted Karim Chaib, CEO of Dopamine.
Some Bitcoin-based NFT collections resisted the downward spiral despite the overall negative trend. In April, The Bitcoin Puppets and the Bitcoin-based collection WZRDs saw their values soar by 2,064.97% and 25,796%, respectively.
“Bitcoin-based NFTs appear to be more resilient than those based on Ethereum and Solana due to their relative newness on the Bitcoin network, attracting curiosity and interest from the crypto community. The scarcity of historical data and the novelty of Bitcoin Ordinals make them attractive, coinciding with the narratives around the Bitcoin halving, which often spark bullish sentiment,” Chaib concluded.
This suggests that although the overall market is in decline, niche markets can still attract significant interest and achieve high valuations.
By Audy Castaneda