This week’s market moves test the NFT traders’ resolution – What’s next?

There is no doubt that there has been a wave of enthusiastic investors accumulating on Web3, and that is despite a drop in sales over the past seven days. Since early May, total market capitalization for non-fossil tokens (NFTs) has increased to more than $ 19.4 billion, with total amounts exceeding $ 1.2 billion in the last seven days.

7 day market rate / NFT market volume. Source: NFTgo.io

Although the volumes are lower than usual, viewers are quickly amazed if the launched projects offer possible products, given the level of liquidity it entails. Although this is not always the case, NFT investors make their assessments based on road maps, advertisements and estimates in which teams participate. However, given the pace at which the fledgling NFT industry is moving, deviations and locks are expected to be expected when investing in NFTs.

Notable projects with the status of the blue NFTs chip such as the Best Cats, Axie Infinity, and even the Ape Yacht Club (BAYC) have deviated slightly from the plans they intended, blocking the enthusiasm of their users slightly. Although this worked well for BAYC, it is important for investors to understand that investing capital in a road map promise can lead to disappointment.

The unpredictability of growing pain

It is exciting to come across a project that seems to be of the blue-chip type. The project can mark all the boxes and the team confirms that it has created a product that works previously, the art is related to different groups of people. If the community is strong and united based on their trust in the project and is supported by the required roadmap, investors will feel convinced that they have found a winner.

In fact, all of this is not a guarantee of success.

Take for example the Cool Pets, which was launched on January 31 and was intended to release its play-to-win (P2E) game, Cooltopia. Some technical errors delayed the launch and caused many NFT traders to lose faith in the project. Additionally, on April 29, Chris Hassett, former CEO of Cool Cats NFT, resigned from his post and the company is now looking for a replacement.

We are looking for a new CEO !!
Chris Hassett resigned as CEO. We thank him and wish him all the best so he can move on. We are working with a high-quality company to help find a world-class CEO. Over time, the founders will lead and focus on the vision and direction of the CC.

– Cold Cats (@coolcatsnft) April 29, 2022

Often the biggest obstacle to project success is unpredictable events that can create material problems, but it is important to recognize the difference between “good” and “bad” problems. For example, accelerating growth can put emphasis on a project’s ability to increase scale safely, but it often puts a focus on it.

Axie Infinity was unsafe due to the hacking of social engineering, resulting in a hike of $ 625 million which represents one of the largest cryptocurrencies in history.

As it stands, the Ronin bridge that transfers money to the Ethereum mainnet is closed. That is, user capital is currently locked in the Ronin network until a full audit is completed. This unpredictable event left investors with their money locked up with their in-game tokens in poor condition. With this in mind, the community has gone through some of its darkest days with investors commenting on how to proceed.

Market cycles can affect morale

Rapid growth not only sets a goal for the project, it can also cause many kitchen cooks to try new ideas. Often, as the project user base grows, so do the number of comments about what is best for the future and the sustainability of the community and the project. This is where the rumors start to form and expectations start to form.

The Otherdeed Digital Land NFTs and Yuga Labs they were the most anticipated currency for 2022 so far, with estimated value of over $ 110,880. Many of these values ​​were associated with the rare Koda NFTs, which were randomly distributed across other lands.

Since the currency was priced in ApeCoin currency, the OpenSea secondary market supported APE as a payment method for future listings. The Otherdeeds were sold at an average price of $ 25,629 before disclosure, but declined to $ 15,510 after disclosure, despite falling APE prices.

All-time average sales price / Other Amount. Source: OpenSea

Although many Web3 investors expected this currency to keep others out of the way, they did not expect the cryptocurrency and NFT wholesale market to enter a downward spiral. Over the past seven days, Ethereum has dropped by 15% and with most of the NFTs being Ethereum-based, their prices have also hit a snag. Solana NF (SOL) NFTs were also heavily affected with SOL hitting about 40% down in the past seven days.

NFT traders also hoped that extraction would boost the NFT market for liquidity. Although liquidity has been included in some collections, total sales of NFTs have dropped by 40% in the last seven days. These numbers indicate that the market may be entering a period of cooling.

30 day NFT market capitalization / market volume: Source: NFTgo.io

With the big market looking red, NFT investors are finding themselves in a difficult situation. Some investors have added more profits than they could afford and are forced to sell their assets at a loss to cover the edge and bankruptcy calls. Others adjust the downside to retail investors in fear because of rising interest rates in the United States.

WAGMI “we will all do it” mantra which has become popular among NFT investors is being tested and traders have to deal with a market cycle that is not adorned with the highest standards of all time and quantity. The good thing is that often during these lulls, builders are born. Common-sense investors use the expected market dips as time for “stack and live”, Adding their cover and current low-level drivers back to new high-level all-time.

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