• NFT trade volume on Ethereum declined 28.5% week-on-week, $22.34 million in digital assets were traded on the ETH network. 
  • Analysts argue that the decline in NFT trade volume is an indicator of a drop in Ethereum prices. 
  • Analysts predict a pullback to $1,500 is likely, but the Ethereum bullish wave has not ended yet. 

NFT trade volume rapidly declined on the Ethereum network, with digital art’s contribution to activity on ETH shrinking. Analysts believe NFTs are dominant gas consumers on Ethereum and a decline in volume could fuel bearish sentiment among ETH holders.

Also read: Three reasons why proof-of-work ETH1 will survive Ethereum Merge

Why NFT activity decline on Ethereum is significant

The STACKS Podcast recently explored the relationship between Ethereum and NFT floor price. Punk9059, a leading influencer and authority on NFT Twitter, joined the podcast to share his thoughts on the relationship between the second-largest cryptocurrency and NFT floor prices. 

When Ethereum climbs, it has historically been a positive for NFT prices, though most investors price their digital art and collectibles in ETH. Punk9059 believes Ethereum price and NFT floor prices have a direct correlation. 

Ethereum price and NFT floor prices

Relationship between Ethereum and NFT floor prices

A decline in Ethereum price resulted in capital outflow from NFTs, as investors pulled cash out of volatile assets including jpegs. Therefore, higher Ethereum prices are the dream scenario for NFT holders as it drives floor prices higher. 

As of July 30, the monthly volume for NFT marketplaces is $626.11 million, a 41% decline from June 2022. An interesting insight is that July was the first month with more unique sellers than buyers. Unique buyer and seller wallets held up better than volumes. 

July 30, 2022, marked the first time when NFT volumes declined year-on-year. 

OpenSea USD Volumes: 2021 v. 2022

OpenSea USD Volumes: 2021 v. 2022

Ethereum’s dominant gas consumer, NFTs, is suffering a decline in trade volume. Checkmatey, a leading analyst, considers this a sign of declining demand. Therefore, the Ethereum price could drop in line with reduced demand. 

Analysts predict Ethereum price pullback to $1,500s

Wolf, a pseudonymous crypto analyst looks at Ethereum’s recovery that started on July 22, 2022, as a V-shaped one. The first target of $1,685 was hit, and the analyst’s next two targets for ETH are $2,492 and $3,373. The analyst argues Ethereum price pullback to $1,500 is warranted, given it completes the V-shaped recovery predicted in his roadmap for the altcoin. 

ETH-USD price chart

ETH-USD price chart 

Analysts at FXStreet meanwhile explore the possibility of Ethereum price decline to $300 in their recent video. For more information, check the video below:

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP