Ethereum NFT market faces slump: Any impact on ETH?

ETH’s price remained stable, but network growth continued to decline.was in a positive direction over the last few days, the ecosystem of Ethereum was facing some major problems.Over the past month, the total sales of Ethereum NFTs fell by 55%. Popular Ethereum NFT collections such as BAYC , MAYC and Crypto Punks witnessed a significant decline of more than 40% in terms of sales and floor prices.

NFTs on other networks such as Solana and Bitcoin were gaining traction compared to the Ethereum network.Moreover, the daily active addresses on the Ethereum network also fell significantly over the last few days along with the gas usage on the network, implying declining overall activity on the Ethereum ecosystem.

A lack of interest from new addresses suggested that the market was not ready to buy ETH at its current price.Additionally, the velocity at which ETH was trading at had grown, indicating that the frequency with which ETH was trading at had risen. Only time will tell whether the price action of ETH co relates with the rising velocity, giving bulls some hope about the future.Coming to the state of the holders, it was seen that most addresses were profitable, as indicated by the high MVRV ratio for ETH.

Even though a high MVRV ratio means that more holders are incentivized to sell their holdings, the presence of long term holders showcased by the high Long/Short difference implies that a large sell-off may not happen anytime soon.

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