Weekly NFT Market Analysis(0217-0223)

This week, there has been a significant surge in the trading volume of NFTs, with an increase of 191.48%, and a positive shift in the trend since February 14th. However, it is important to note that trading volumes may not reflect the entire NFT trading market, as various factors such as scams, wash trading, and NFT marketing can inflate actual market trading volumes. It is crucial to analyze the trading volume thoroughly to gain a clear understanding of the market’s actual state. This week, the “MechMinds” project team had a notable impact on the trading volume, contributing up to a 22% increase with their NFT marketing strategy.

NFT Market Cap & Trading Volume Analysis (ETH)

NFT Market Cap & Trading Volume in ETH (NFTGo.io)

Based on the market data, it is evident that the Market Cap increased by 10.22(1.54%) and 566.47K(290.46%) in February, showing a positive trend. However, it is important to note that the significant increase in trading volume on February 20th is primarily due to the marketing campaign by the NFT project team “MechMinds” which accounts for 125,000 ETH of the trading volume and this increase in trading volume does not reflect the overall market sentiment and traders.

Traders Ratio Analysis

Traders Ratio of 2022-2023 (NFTGo.io)

The overall number of traders has increased by 13.82% from last week, with an additional 70,637(8.82%) buyers and 94,083(20.19%) sellers. While traders are still more prone to selling NFTs than buying them, the overall ratio is slightly positive and shows signs of recovery. Furthermore, the greater the number of sellers may be attributed to the current market conditions, indicating that some traders are prone to sell off their assets due to market uncertainty.
These market uncertainties are not new and have been a recurring theme in the NFT market. Many factors such as government regulations, environmental concerns, and technical issues have contributed to market instability. However, despite these challenges, the NFT market has continued to gain traction and has seen increased adoption among mainstream users accelerating the development of the NFT ecos.

Weekly Trading Volume Distribution

Weekly Trading Volume Distribution(NFTGo.io)

In this week’s trading volume of 566K ETH, the highest collection is the “Otherdeed” collection. Since the actual trading volume of “MechMinds” is 340 ETH.
As far as the market volume distribution, most of the blue-chip collections maintained their usual trading volumes and a new collection of “Checks VV - Opepen Edition” has reached a trading volume of 20.42K ranking at 6th highest trading volume this week.
It is interesting to note that the surge in trading volume of the “Otherdeed” collection is largely due to the recent announcement by the creators of the collection, who have hinted at the release of a new series of NFTs. This announcement has generated a lot of buzz and anticipation among NFT enthusiasts and collectors, resulting in a significant increase in trading volume for the existing collection.
Additionally, while the trading volume of most blue-chip collections remained stable, there were some notable exceptions. The trading volume of the “CryptoPunks” collection, for instance, saw a slight dip this week, which could be attributed to the rising popularity of newer and more diverse collections.

Top NFT Sales of the Week

Weekly Top NFT Sales (NFTGo.io)

The MechMinds project team’s marketing strategy was a major factor in the record-breaking sale of the “MechMinds #7689” NFT, which fetched an astonishing price of 125K ETH this week and is now the most expensive NFT ever sold on the Ethereum blockchain.

Trending Project Analysis “MechMinds”

Background Info

The MechMinds project comprises of 9672 NFTs, each possessing a distinctive personality and level of intelligence. The project is designed with a deflationary NFT which enables owners to engage in conversations on any subject with their exclusive MechMind companion, powered by OpenAI’s GPT Model.

Marketing Strategy of MechMinds

The Marketing strategy of “Mechminds” was based on the CryptoPunk sale that happened in 2021. Which created a lot of issue in the NFT community for being the highest priced NFT to date. They have sold their “MechMind #7689” with OpenSea’s zero-fee transaction for promotional purposes. With this move from the project, it led to a lot of attention and was listed as the top and trending in the OpenSea ranking and was able to attract various types of traders such as blue-chip holders, whales and normal traders after the 125K transaction.

What are Deflationary NFTs?

MechMinds NFT Collection Status (MechMinds)

In recent years, there has been a significant surge in the popularity and applications of non-fungible tokens (NFTs). However, there is a relatively unexplored area in the NFT space called “Deflationary NFTs”. These types of NFTs are specifically designed to decrease in number gradually over time using techniques like “burning”, “tokenomics”, and limited supply, which can potentially lead to an increase in their value and potential benefits and drawbacks.

Trading Volume Analysis

Trading Volume of “UINTS”(NFTGo.io)

The project was minted on Feb 13th with total of 9672 NFTs, but failed to mint within a week period and its minting was completed on Feb 21st. This indicates that the MechMinds collection did not attract any attention and The Graph shows it did not have much trading activity until the marketing transaction proceeded by the project member. Shortly after the transaction of 125,000 ETH, it attracted 26 whales, 72 blue-chip holders and around 5800 transactions achieving awareness in the marketplace and a record of highest sold NFT on Ethereum chain.

Holder Trend

Holders Trend of “UINTS”(NFTGo.io)

Currently with 1567 NFT holders, 28.66% of the holders are not considered flippers, while 71.34% of the holders have held the NFT less than 7 days, along with 67.70% have sold their NFT immediately after minting their NFTs. This is inevitable because most of the holders and traders were mostly attracted by sudden increase in trading volume, seeing an opportunity for investment and profits. While there are 2 whales and 90 blue-chip holders, this project should be further examined if it will last for the long term.

Conclusion

In summary, the NFT market has experienced a positive growth trend in February, marked by an increase in both market cap and trading volume. However, it is crucial to examine the trading volume data closely, as various factors can contribute to the inflation of actual market trading volumes. While the ratio of traders holding onto their NFTs has improved, many still prefer to sell due to market uncertainty.

Author: Korea University Blockchain Research Institute
This article represents only the views of the researcher and does not constitute any investment suggestions.
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