What this rising correlation between crypto & NFT prices can mean for investors

As per data presented by crypto reporter Colin Wu, the transaction volume of the Yuga Labs series has gone down, especially in the last 24 hours. He further mentioned in his tweet that Otherdeed, MAYC, and BAYC have witnessed a drop of 44%, 41%, and 30% respectively.

As per statistics on OpenSea, the trade volume of not only the aforementioned NFTs has dropped, but other NFT collections, such as OkayBears, Azuki, BEANZ official, and Murakami Flowers have also witnessed a significant dip.

What do the statistics have to say?

The OpenSea daily volume for Ethereum stood at approximately 52 million as of 8 May as compared to the daily volume on 7 May which stood higher at approximately 80 million. Furthermore, the number of NFTs sold, in what we can consider the first 10 days of the month, stood at approximately 456K.

Source: Dune Analytics

Taking into consideration the OpenSea daily NFT transactions for Solana as of 8 May, the count stood at 16,771 which was higher as compared to the number of transactions on 7 May which stood at 13,631. A spike in the number of Solana-based NFTs can further act as an indication toward a newfound interest in Solana-based NFTs.

However, the OpenSea daily volume for Solana did witness a downfall on 8 May. The daily volume fell to approximately 24K from a daily volume of approximately 28K on 7 May.

Source: Dune Analytics

In addition to the data given above, as per information from NonFungible, the number of sales (USD) in a week has dropped significantly. The number of sales stands at 32K, which is down by 72.96%. Furthermore, the sale in USD also fell to $35 million, which was 95.53% lower than the sales amount generated last week. As of 8 May, the number of sales and amount generated from the sales stood at 32,066 and approximately $3.5 million.

Source: NonFungible

Is the crypto market affecting NFTs?

As of 7 May, the total cryptocurrency market cap stood at $1.7 trillion, given the dip the cryptocurrency market has been experiencing lately. However, does the ongoing drop affect the sales and trading volume of NFTs?

As per a research conducted by ScienceDirect in 2021, the sale and volume of NFTs may not depend and be driven by the ongoing movements in the cryptocurrency market. However, the research suggests that there may be some co-movement in the NFT and the cryptocurrency space. It states that there is a high possibility that the factors driving or limiting the growth of the market may be the same.

Thus, the factors driving the uncertainty in the crypto market are the same factors leading to low movement in the NFT market space. Furthermore, an uncertainty in the crypto space will be followed by uncertainty in the NFT market as well.