Morning Minute | NFT Nose Dive

Morning Minute | NFT Nose Dive

GM!

Take a minute to catch up on the latest in the Web3 space with today's NFT market analysis, top movers, and upcoming mints:

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TylerD's Market Summary

The NFT market has quietly fallen hard this week against a background of crypto and macro volatility. Why is it happening?

📉 NFTs Fall Hard

A very uncertain macro backdrop has seemingly stopped the mini-bull run that NFTs experienced in Q1 2023.

The $BLUR airdrop created a euphoric moment on Valentine's Day (and $300M+ liquidity injection), and the Blur farming incentives carried the market for a few weeks after.

But the euphoria has gone away, replaced mostly with pain and questions of where many NFTs go from here (and if they will recover).

Here's a quick look at some notable NFT floor prices and their 30-day moves:

  • Punks: 67.5 ETH floor (+6%)
  • BAYC: 64.5 ETH (-14%)
  • Fidenza: 80.5 ETH (+2%)
  • Ringers: 42 ETH (-29%)
  • MAYC: 13.95 ETH (-10%)
  • Azuki: 14.7 ETH (-6%)
  • Squiggles: 11.25 ETH (-15%)
  • Moonbirds: 4.11 ETH (-37%)
  • Clone X: 3.64 ETH (-26%)
  • Doodles: 3.89 ETH (-27%)
  • Pudgy Penguins: 5 ETH (-21%)
  • Memeland Captainz: 5.05 ETH (+41%)
  • Otherdeeds: 1.75 ETH (+9%)

So in quick summary:

  • The high-end art/PFP market held up strong (Punks and Fidenzas)
  • The mid-tier art and PFP sector got hit hardest, down 15%-40%
  • The Yuga eco (and Azuki) held up relatively better, down 5%-15%

Projects that were once considered "blue chips" like Clone X, Doodles and Moonbirs are now "mid-tier PFPs," and even that classification is at risk.

How did we get here?

What's driving the price action

My read on the current market (focused on art and PFPs) is based on the following 4 factors:

  • Volume is down as the draw of Blur farming has worn off, and more and more traders are moving to the sidelines to wait for the next catalyst
  • Rotation to "safety" - Punks are emerging once again as the most secure bet in NFTs (Fidenzas experiencing this in the art sector)
  • Mid-tier PFPs are seeing the impact of utility risk - they have played their cards and there's not much to look forward to (and the cards they played were not that good)
  • Generative art is in a periodic bear cycle as there haven't been many interesting drops, and AI Art has taken the spotlight (AI art is not in a bear cycle)

Let's unpack each briefly.

Volume and Unique Users are down

Volume is clearly down sharply from post-Blur Season 2 announcement highs.

The price of $BLUR has been dipping, making farming seem less enticing, and traders generally seem tired of the whale manipulation. Farming has become a whale's game.

Traders also seem to have simply moved to the sidelines.

Unique wallets are at yearly lows.

This is likely tied to the macro banking and crypto volatility, as well as the poor execution by the mid-tier PFPs. 

"There is nothing to buy!" That's the comment sentiment in trading groups right now, and likely inspired the current "degen meta" (where traders chase low-cost projects for quick ROI and get out).

Punks and the flight to safety

Punks have effectively traded in the 60 ETH - 70 ETH range since September 2022. They became a stablecoin.

Well, with the erosion of trust in crypto stablecoins after the USDC depeg, it seems there is more interest in the NFT stablecoin.

And that interest has led to the floor gradually moving up to 67 ETH.

Anecdotally, there are more and more Punks popping up as PFPs on crypto Twitter. Another sign of renewed interest in the OG PFP collection.

Yuga and Azuki ecosystems are also looking strong here and holding up well relative to the rest of the market.

Mid-tier PFPs have dropped the ball

There's not much to be excited about in general in the mid-tier PFP sector.

  • RTFKT and Clone X are in a steep downtrend tied to the flood of NFTs in the ecosystem, poor execution with MNLTH and recent merch drops, along with growing sentiment that holders are treated as customers. With Project Animus as mostly an unknown, there just are not many reasons to buy into this eco right now.
  • It's a similar story for Doodles. The Dooplicator utility was revealed, the first-gen wearables were created - now what? Doodles 2 feels a long way away, and it's not clear there is sufficient demand for it. And some new communication last night about their move from NFTs to become a "media franchise" did not go over well with holders.
  • Moonbirds have faced a litany of issues, well documented here, and are turning over their base tied to their new art-focused north star. But with this first art drop "Archive of Feelings" not doing super hot (0.185 ETH floor), that art focus might not be that lucrative for holders.
  • Pudgy Penguins and Memeland Captainz look the strongest currently, in this mid-tier sector. But each face their own upcoming execution risks (Pudgys with Rogs, Memeland with questing/reveals and the continued rollout of their products).

My gut take right now - this sector continues to bleed and some of these projects which were once "blue chips" get relegated to the low tier sector.

Art Cools Off

Regarding the art sector (putting Fidenzas aside):

  • The open edition (OE) meta came and went, and took a decent chunk of liquidity out of the market
  • AI art has caught more interest and liquidity on the back of the AI/ChatGPT revolution and Claire Silver's success in mainstream
  • The OE and AI art trends took the spotlight off of Art Blocks and generative art, and that factor coupled with a lack of new, interesting projects has put Art Blocks into a bear cycle
  • Jack Butcher and his ecosystem of Checks and Opepens entered the scene as well as another art option, though they have been hit hard in this downturn (likely due to their newness and lack of established conviction)

In general I'm not worried about the art sector; it will recover and be fine.

Art Blocks especially has weathered some severe bear cycles. Collectors have been here before.

What happens now?

Crypto volatility is clearly impacting the market right now. If and when crypto and macro stabilize, NFTs will likely rebaseline.

But that does not mean we see full recovery across each sector.

A new catalyst is likely needed to pull out of this longer bear cycle (and yes this last run was just a mini-bull or even a bull-trap), and it is hard to see what that catalyst is right now.

Until many more new users enter the ecosystem, the bear likely continues.

🚚 What else is happening in NFTs?

Here is the list of the other major headlines from a slower day in NFTs:

  • Trading volume came in just under 29k ETH, with most NFTs down another 5%-10% on the day (as described above)
  • Yuga's The Summoning opened last night, releasing a new HV-MTL collection that saw over 4,500 ETH volume and a 2.35 ETH floor, despite a mistake with the Companion Trait (that Yuga did make right); the rarest Holo types hold a 25 ETH floor and Companions are at 5.3 ETH
  • Doodles launched a new "sock-piling" competition with a reward of "gold socks" (you can't make this stuff up)
  • Mocaverse rolled out their "Mocana Map" as a visual representation of their plan (though without much specific detail)
  • Sotheby's will hold two "Natively Digital" themed NFT auctions this month, featuring digital art inspired by the popular internet trend "oddly satisfying" from Reddit
  • Fewocious dropped a new trailer for FewoWorld, showing first glimpses at the Humanoid species of PFPs coming soon
  • Jack Butcher and Mason Rothschild are throwing an invite-only party during Outer Edge (previously NFT LA)

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

  • The crypto market was mixed on the day; BTC +1.6% at $24,970, ETH -1% at $1,660
  • Fidelity's retail crypto product goes live, now open to the public, providing commission-free trades to millions of users looking to invest in or trade bitcoin and ether
  • The Fed's emergency loan program could inject up to $2T of funds into the banking system over the next 12 months per JPMorgan
  • Sherwin Williams and TOUS Jewelry both filed trademark applications involving NFTs in the past week

🚀 NFT Total Volume

  • Wrapped CryptoPunks (6,051 ETH, 67.2 ETH Floor)
  • MAYC (4,833 ETH, 13.95 ETH)
  • HV-MTL (4,504 ETH, 2.34 ETH)
  • Azuki (2,727 ETH, 14.3 ETH)
  • Sewer Pass (2,553 ETH, 2.4 ETH)

📈 NFT Floor Price Increase

  • Seizon (60%, 0.22 ETH Floor)
  • Defi Apes (16%, 0.61 ETH)
  • Nouns (8%, 27 ETH)
  • Mocaverse (9%, 1.2 ETH)
  • DigiDaigaku (6%, 7 ETH)

🗓 Upcoming NFT Mints and Reveals

Today is a very slow day for new mints.

The Fellowship Patron Pass is likely the most interesting, acting as a sort of mint pass for upcoming Fellowship AI collection drops.

Otherwise, expect more volume on HV-MTL today, especially if more details are released regarding the next phase.

  • Fellowship Patron Pass (1:00 p.m. ET); Dutch auction
  • The MC by BUA (1:00 p.m. ET); $100

Enjoy this write-up? Follow along with me on Twitter @tyler_did_it or reach out via email tyler.warner@luckytrader.com.

For all volume and floor price data, see Lucky Trader's Project Rankings page.

For all upcoming mints, see Lucky Trader's Project Schedule page.

Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice. AI may have assisted in the creation of this content.