If prices plummet in an illiquid market, how long will it take someone to realize it?
While fungible tokens that are traded on centralized and decentralized exchanges have great transparency regarding price movements, non-fungible tokens can be more difficult to track. Due to its illiquid nature, it can be difficult to gauge overall market sentiment for a project, which is a dynamic that has led eGirl Capital member Mewny to call the NFT fixes “silent drops”“.
i really like @ mewn21 phrasing of NFT crash as a “silent crash”
in liquid markets, you can see prices going down every day. in NFT-land, sellers have slower “market reaction”. instead of sellers adjusting prices downwards everyday for a month, it may just -80% “overnight”
– tuba (@ 0xtuba) March 26, 2021
I really like @ mewn21’s phrase that the fall of the NFTs is a “silent fall”
In liquid markets, prices go down every day. In the land of NFTs, sellers have a slower “market reaction”. Instead of sellers adjusting prices down every day for a month, it might just be -80% “overnight”
In a silent crash, speculators might not even be aware that it is underway – buyers just evaporate and sellers don’t move their wares. However, metrics such as “floor price” —the lowest price at which an NFT can be purchased for a particular project — as well as total volume, can indicate that a bull is turning into a bear.
There could also be bad news on the horizon for NFT collectors, as signs point to a nasty dip in progress.
The CryptoPunks, that are found Among the first and most popular NFT projects for collectors, they have seen a decrease of more than 40% in the base price to 14 ETH (approximately $ 28,000 at press time). The price capitulation has led to some chain horror stories today, such as that of one speculator who sold a Punk for 16 ETH after buying it for 25.5, and another who sold for 27.99 after a purchase for 42 ETH:
– CryptoPunks Bot (@cryptopunksbot) April 3, 2021
Punk 8282 bought for 27.99 ETH (57,228.07 USD) for 0xd3e2e7 from 0x691b87.
CryptoPunks are also not the only high-profile project that is seeing a market-wide correction. The data from evaluate.market shows that Sales volume across multiple price categories for NBA Top Shot have declined precipitously from a peak on February 22.
One of the semi-anonymous and self-described Top Shot enthusiasts, Jordan, who has charted the decline, points to two specific stocks due to the sharp drop.
“The market has been trending down since February 22. There seem to be two types of sellers. One, the investor who entered early and wants to cash in at an exponential profit. Two, the investor who bought at or near the top and you can’t bear to watch your investment lose value by the day, “he said.
– ☄️☄️☄️☄️ (@jfresshhh_) April 3, 2021
@topshotanalytix @economist @girldadNFT for everyone who wishes they had joined TopShot in January instead of February. Well … welcome to January.
Watching base prices plummet is difficult, regardless of the project. According to the Nonfungible market tracking website, the pullback is affecting the entire market: total number of sales, total sales value and active wallets are down in 7 and 30 days.
However, Jordan believes this is a healthy, short-term setback.
“I think it’s a healthy and relatively short-term correction. The rate at which prices rose from January 1 to February 22 was unsustainable. I think the next few months will continue to be bumpy, but I’m very bullish overall.”
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