Data shows the Non-Fungible Tokens (NFTs) have enjoyed a revival recently, something that could signal a bull market for the cryptocurrency sector.
NFT Volume On Ethereum Has Risen To Highest Level Since July
According to data from the market intelligence platform IntoTheBlock, the NFT market is finally showing some increased activity after what was a rather long while of silence.
The relevant indicator here is the “trading volume,” which keeps track of the total amount of these collectible assets that are being traded daily. In the context of the current discussion, only the NFTs on the Ethereum blockchain are of interest.
When the value of this metric rises, it means that these assets are seeing more trading activity. Such a trend can be a sign that the interest in these unique tokens is going up.
On the other hand, decreasing values of the indicator suggest the NFTs are losing their popularity among investors, as their usage is dropping on the blockchain.
Now, here is a chart that shows the trend in the trading volume of the ETH-based NFTs over the past year:
Looks like the value of the metric has shot up in recent days | Source: IntoTheBlock on X
As displayed in the above graph, the NFTs had a relatively low volume during the past few months, but recently, the indicator’s value has started to show some rise.
Prior to this, the metric had last seen some notable increase during the early parts of the year, as Bitcoin and the wider cryptocurrency market rode lasting bullish momentum.
As the rally in the sector faded, though, the NFTs took a hit as well. In July, this class of digital assets saw interest plunge to lows and the volume continued to trade sideways at these bottom levels until recently.
Interestingly, the metric didn’t register any significant increase when the rally toward $35,000 first occurred for BTC, but as the coin has seen further growth, the NFTs on Ethereum have finally started to lift off.
The volume of these assets recently crossed the $30 million mark, which is the highest level the indicator has observed since July. This recent growth is also naturally visible through the individual volume of the popular collections, as the recent chart for CryptoPunks shared by IntoTheBlock recently shows.
These tokens appear to have seen a burst of interest recently | Source: IntoTheBlock on X
The latest surge of interest in the NFT market can certainly be a positive sign for the greater cryptocurrency sector. Usually, capital enters the space through the likes of Bitcoin and Ethereum, then as investors increase their risk appetite, they rotate it over to the alts and other blockchain applications like these collectibles.
Though this volume rise could indeed be a signal that such a rotation of capital is underway, there is also the possibility that the interest is simply coming from investors looking at the NFTs as their own, separate financial instrument.
Bitcoin has registered an uplift of more than 38% in the past month as the coin’s price is now floating above the $37,000 level.
BTC has seen a surge in the last few weeks | Source: BTCUSD on TradingView
Featured image from Andrey Metelev on Unsplash.com, charts from TradingView.com, IntoTheBlock.com