Non-fungible tokens (NFTs) are on the rise, and for those fixated on rising prices, the market may appear to be booming. However, overall activity tells a different story.
Headlining the event are Bored Ape Yacht Club and Pudgy Penguins. Their floor prices, the lowest possible acquisition price, have risen by double digits in recent weeks and their tokens have posted double digit gains. Still, the comeback unfolds with far fewer buyers.
Pudgy Penguins’ floor has risen above 5 ETH, up more than 20% on the week, with 201 sales and nearly 1,000 ETH in volume over the past seven days supporting the move. BAYC’s bottom is up 81% over the past 30 days, rallying from lows.
Floor prices are an important target to follow. In an NFT collection, the floor price is the lowest item currently for sale. If the cheapest Pudgy Penguin on the market is listed at 5.38 ether (ETH), it will be the bottom of the collection. A rising floor generally means buyers are willing to pay to get in. A falling floor usually means occupants are rushing to get out.
But underneath the overall price gains, the structure of the market tells a different story, as broad participation shrinks.
According to CryptoSlam, global NFT sales fell to around $175 million in April from $304 million in February, while total transactions and active users both fell by nearly half.
Average sales prices, meanwhile, more than doubled month over month, rising from $30.60 in March to $67.38 in April. These two data points describe the same phenomenon from opposite ends. A smaller pool of capital concentrates on high-value trading in blue-chip collections, rather than broad demand returning to the market.
Even within blue chips, the quality of demand varies. Pudgy Penguins is experiencing relatively high transaction numbers along with rising prices, a sign of sustained activity. In contrast, aggregators such as CryptoPunks have recorded a similar weekly volume with far fewer trades, suggesting that a small number of large transactions have an overall impact on price.
The broader market signals remain mixed. Wash trading still accounts for around 50% of total volume according to CryptoSlam, and overall trading profit remains negative, indicating that many participants are still underwater despite the recent recovery.
Overall, the data points to a market that is stabilizing but not yet expanding. Prices are rising, but participation is falling, and activity is concentrated in a handful of fundraisers.
At the same time, ETH is up about 18% over the past month and BTC is up almost as much. Part of what looks like an NFT-specific rally is simply beta to a crypto-wide risk-on move, with blue-chip collections priced in ETH catching the updraft along with everything else.
