Non-fungible tokens (NFTs) are on the rise, and for those fixated on rising prices, the market may appear to be booming. However, the general activity tells a different story.
Leading the rally are the Bored Ape Yacht Club and Pudgy Penguins. Their rock-bottom prices, the lowest possible purchase costs, have risen by double digits in recent weeks, and their tokens have posted double-digit gains. Yet the comeback is taking place with far fewer buyers.
The Pudgy Penguins floor has risen above 5 $ETHan increase of more than 20% on the week, with 201 sales and almost 1,000 $ETH in volume over the past seven days to support this move. BAYC’s bottom has risen 81% over the past 30 days, rebounding sharply from lows.
Rock bottom prices are an important metric to track. In one $NFT collection, the reserve price is the lowest priced item currently for sale. If the lowest priced Pudgy Penguin on the market is listed at 5.38 ether ($ETH), which becomes the floor of the collection. A rising floor generally means buyers are willing to pay to get in. A falling floor usually means holders are rushing for the exit.
But beneath the big price increases, the structure of the market tells a different story, as broad participation declines.
According to CryptoSlam, worldwide $NFT revenue fell from $304 million in February to about $175 million in April, while total transactions and active users both fell by almost half.
Meanwhile, average sales prices have more than doubled month over month, from $30.60 in March to $67.38 in April. These two data points describe the same phenomenon from opposite sides. A smaller capital pool focuses on high-quality transactions in top collections, rather than broad demand returning to the market.
Even within the blue chips, the quality of demand varies. Pudgy Penguins is seeing relatively high transaction volumes alongside rising prices, a sign of continued activity. Collections like CryptoPunks, on the other hand, have recorded similar weekly volume with far fewer transactions, implying that a small number of large transactions have an outsized impact on the price.
Broader market signals remain mixed. According to CryptoSlam, wash trading still accounts for roughly 50% of total volume, and overall trading profits remain negative, indicating that many participants are still underwater despite the recent rebound.
Taken together, the data points to a market that is stabilizing, but not yet expanding. Prices are rising, but participation is falling and activity is concentrated in a handful of collections.
At the same time, $ETH is up about 18% in the past month, and BTC is up almost as much. Part of what looks like a $NFT-specific rally is simply a beta version of a crypto-wide risk move, with blue-chip collections priced in $ETH catching the updraft in addition to everything else.