Ethereum NFT Market Faces a Slump: Any Impact on ETH?

Interest in Ethereum NFTs dropped significantly as sales plummeted over the past month.
The price of ETH remained stable, but network growth continued to decline.

Even though the price movement of Ethereum [ETH] has been in a positive direction over the past few days, the Ethereum ecosystem has been facing some major issues.

NFT volumes are starting to decline

Over the past month, total sales of Ethereum NFTs fell by 55%. Popular Ethereum NFT collections such as BAYC (Bored Ape Yacht Club), MAYC (Mutant Ape Yacht Club), and Crypto Punks witnessed a significant drop of over 40% in terms of sales and rock bottom prices.

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NFT volumes are starting to decline How are the addresses holding up?

NFTs on other networks such as Solana and Bitcoin gained popularity compared to the Ethereum network.

Source: Crypto Slam

Furthermore, the daily active addresses on the Ethereum network have also dropped significantly in recent days along with gas consumption on the network, implying declining overall activity on the Ethereum ecosystem.

This could be a sign that Ethereum’s popularity as an ecosystem was declining significantly.

While interest in ETH has increased due to the hype surrounding the ETF and has driven its price higher, declining interest in the Ethereum ETFs could cause a problem for ETH in the long term.

Source: Santiment

At the time of writing, ETH was trading at $3,786.76 and its price was down 0.68%. Network growth around the ETH token had dropped significantly, implying that the number of new addresses of interest for ETH had drastically reduced.

A lack of interest from new addresses suggested that the market was not ready to buy ETH at its current price.

Some bulls may be waiting for a correction before accumulating more ETH in the future.

Additionally, the rate at which ETH was traded had increased, indicating that the frequency at which ETH was traded had increased.

Only time will tell if ETH’s price action correlates with its rising rate, giving the bulls some hope about the future.

Source: Santiment

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How are the addresses holding up?

In terms of holders’ standings, it appeared that most addresses were profitable, as evidenced by the high MVRV ratio for ETH.

Even though a high MVRV ratio means that more holders are incentivized to sell their holdings, the presence of long-term holders, as evidenced by the high Long/Short difference, implies that a major sell-off may not happen anytime soon.