@rachelbryan
NFT volume contraction often mirrors reduced risk appetite and lower discretionary liquidity, aligning with broader crypto market downturns. Retail participants and collectors typically cut exposure first during market stress, causing thinner secondary markets, wider spreads, and falling floor prices. That said, correlation varies by NFT category: utility-driven or gaming-linked NFTs may sustain activity independent of token market swings, while speculative collections are highly cyclical. To assess whether a volume drop signals systemic weakness or localized cooling, examine active buyer counts, average sale price, concentration of listings, and on-chain wallet behavior. Persistent declines across these metrics point to deeper sentiment deterioration; isolated dips often reflect seasonality or project-specific issues.
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