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

There is no doubt that passionate investors are accumulating on Web3, despite the fact that the total sales volume has fallen in the last seven days. Since the beginning of May, the total market capitalization of non-fungal tokens (NFTs) has risen to more than $ 19.4 trillion, and in the last seven days the total volume has exceeded $ 1.2 trillion.

7 day market cap / volume of NFT market. Source: NFTgo.io

Although volumes are lower than usual, viewers are quick to ask whether the launched projects provide viable products, given the amount of liquidity injected into them. While this is not always the case, NFT investors are conducting their own assessments based on the roadmaps, forecasts and projections shared by the team. However, given the speed at which the NFT sector is in its infancy, detours and blockages are expected when investing in NFTs.

Outstanding projects like Cool Cats ’Cool Pets, Axie Infinity and Bored Ape Yacht Club (BAYC) and the blue-chip status NFT have moved slightly away from the planned planets, reducing users’ enthusiasm a bit. While it clearly worked well for BAYC, it’s important for investors to understand that investing capital in the promise of a roadmap can lead to disappointment.

Unexpected growth pains

It’s exciting to come across a project that looks like a blue-chip caliber. The project can tick all the boxes and proves that the team has previously developed a work product, the art resonates in different groups of people. If the community is strong and gathers around their opinion about the project and is supported by a desirable roadmap, investors will feel confident that they have found a winner.

Of course, all of this is no guarantee of success.

Take, for example, Cool Pets, which was released on January 31st and wanted to release its play-to-win (P2E) game, Cooltopia. Some technical delays delayed the launch and many NFT traders lost confidence in the project. Also on April 29, Chris Hassett, former CEO of Cool Cats NFT, resigned and is now looking for a replacement company.

We are looking for a new CEO !!
Chris Hassett resigned as CEO. We thank him and wish him all the best. We are working with a top company to help you find a world-class CEO. In the meantime, the founders will guide and guide the CC’s vision and direction.

– Cool Cats (@coolcatsnft) April 29, 2022

Often the biggest obstacle to the success of a project is unforeseen events that can lead to logistical problems, but the difference between “good” and “bad” problems is important. For example, accelerating growth can lead to stress in the ability to scale the security of a project, but it often sets a goal.

Axie Infinity was not immune to a social engineering hack, resulting in a $ 625 million hack that represents one of the largest cryptocurrency exploits in history.

The Ronin Bridge, which transfers funds to the main Ethereum network, is now closed. That is, the user capital is locked to the Ronin network until the entire audit is completed. This unforeseen event left investors locked in their capital and left the tokens in play on a strong downward trend. In this regard, the morale of the community has gone through some of the darkest days as investors have expressed their opinion on how they have continued.

Market cycles can affect morale

Accelerating growth not only sets a goal for a project, it can lead many kitchen chefs to experiment with new ideas. Often, as the user base of a project grows, the number of opinions about what is best for the community and the future and sustainability of the project also increases. This is where speculation begins and hopes arise.

Otherdeed Digital Land NFTs at Yuga Labs were the most anticipated currency so far in 2022, with speculative value propositions in excess of $ 110,880. Most of these values ​​were attributed to the rare Koda NFTs, which were randomly scattered on the lands of Otherdeed.

As coins were priced in ApeCoin currency, the OpenSea secondary market supported APE as a payment method for future listings. Otherdeeds sold at an average price of $ 25,629 before it was revealed, but dropped to $ 15,510 after it was revealed, along with a drop in the APE price.

Average sales price volume / On the other hand. Source: OpenSea

While many Web3 investors expected this coin to sideline others, they did not expect the general cryptocurrency and NFT markets to enter a downward spiral. In the last seven days, Ethereum has fallen by 15% and with most NFTs based on Ethereum, their prices have also taken a hit. Solana-based NFTs (SOLs) also had a significant impact in the last seven days with a trend of almost 40% SOL.

NFT traders also predicted that minting would boost the NFT market liquidity. Although liquidity has been introduced in certain collections, the total sales volume of NFTs has fallen by 40% in the last seven days. These numbers suggest that the market may enter a cooling period.

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

With a large part of the market appearing in the red, NFT investors are finding themselves in difficult situations. Some investors have widened their leverage much more than they can cover and have to sell their assets at a loss to cover margin calls and settlements. Others are streamlining the disadvantages for retail investors in horror Because interest rates have risen in the United States.

WAGMI, which has become popular among NFT investors, is testing the “we will do it all” mantra and traders have to deal with market cycles that are not adorned with all-time highs and monumental volumes. One positive point is that builders are often born in these quiets. Expert investors use predicted market breaks as a moment “to accumulate and survive”, Increasing their portfolios and returning the current lows to new highs of all time.

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