The NFT marketplace, which only a short while ago represented the height of digital innovation and speculative investment, has recently taken a heavy hit. This writeup on FearlessToken.com explains the reasons behind the drop in great detail. It is a guide to the performance of different blockchains and NFT collections. It offers insights into whether this is a temporary setback or a sign of a larger market trend, providing expert opinions and potential future scenarios for the NFT market. FearlessToken.com shakes off the hype to get down to brass tacks and share exactly what the NFT space is like today.
Understanding Bull Markets in Cryptocurrency
A bull market in crypto refers to a lengthy period of rising prices and generally positive sentiments from investors. These waves are usually led by their adoption, technology and regulatory tailwinds. Knowing the bull market dynamic is extremely important for investors who want to ride the wave of opportunity that these markets offer.
How do crypto bull markets begin and conclude?
The accumulation stage Crypto bull markets tend to start with an accumulation phase. In these times, dreamers, opportunists, and crypto believers flood in to get bargain prices on digital assets. As prices continue to rise, and as more people become aware of bitcoin, more investors pile in, further fuelling demand and prices. Bull markets tend to end with a final blow off topping euphoria and speculation. This fervor and enthusiasm ultimately results in a drastic downturn or crash when the market becomes too overbought or exuberant.
Typical duration of crypto bull runs
The length of crypto bull runs is inconsistent. While some bull markets might continue for a few months, others can take a year or longer. There are numerous variables that dictate how long a bull market persists. These can be external factors, like the macroeconomic environment, technology, or investor appetite. Historically, Bitcoin bull runs have happened about every 4 years, following the Bitcoin halving event.
Key Trends to Monitor During a Bull Market
In a bull market, as we are currently experiencing, it’s imperative to stay informed on the latest trends to spot potential opportunities and risks. View on high-level statistical trends across the performance of thousands of different cryptocurrencies. Watch the space as decentralized finance (DeFi) applications develop and a new wave of exciting NFT projects unfold! Proactively monitoring these trends will position investors to make better decisions and optimize their return on investment.
Bear markets, the opposite of bull markets, are marked by extended downtrends in price and negative investor sentiment. Multiple academic studies have identified different causes that can lead to these reversals. They can be triggered by macroeconomic disasters, regulatory actions, or just a general loss of confidence in the market. Bear markets need bear strategies. In bear markets, you need to do things differently and be more conservative.
Identifying a bull run using technical indicators
Technical indicators can be helpful tools in spotting these upcoming bull runs. Other popular indicators are moving averages, relative strength index (RSI), and moving average convergence divergence (MACD). These indicators allow investors a glimpse into up-and-coming trends and the ability to measure momentum strength of each market.
Strategies for profit-taking during a bear market
During a bear market the emphasis is on preserving capital and limiting downside. Several strategies can be employed to achieve this, including:
- Short Selling: Borrowing an asset and selling it, with the expectation of buying it back at a lower price.
- Buying Put Options: Purchasing the right to sell an asset at a predetermined price, protecting against further price declines.
- Selling Covered Calls: Selling call options on assets you already own, generating income while potentially limiting upside.
The benefits of HODLing while earning interest
HODLing, or holding on for dear life, is a common strategy among long-term crypto investors. Buying and staking crypto for the long-term, or HODLing, is a proven investment strategy. Remember, consider the opportunity cost of not being proactive with your investment management. You can earn interest on your crypto holdings by using staking or lending platforms. This strategy protects you by compensating for losses when the market is in a bear phase.
Managing gains with HIFO accounting
HIFO, or Highest-In, First-Out, is the best accounting method. In particular it allows you to reduce your capital gains tax burden when selling your cryptocurrency holdings. This tracking method requires that the assets with the largest cost basis are sold first, minimizing the net taxable resulting gain.
Converting profits into stablecoins
During a bear market, converting profits into stablecoins like USDT or USDC is a smart strategy. Therein lies the issue. Stablecoins, as the name implies, are meant to be stable—stable in value, usually pegged to something like the US dollar. By moving profits to stablecoins, investors can secure their investments from deeper losses as the crypto market continues to see price drops.
Importance of diversifying your portfolio
Diversification is a fundamental principle of investing. When you spread your investments out over multiple asset classes, you limit your risk. In the world of crypto, diversification refers to expanding your portfolio. These operations range from investing in different cryptocurrencies to investing in other assets such as stocks, bonds and real estate.
Developing an effective exit strategy
An exit strategy is simply a pre-decided plan for when you’ll sell your crypto assets. This strategy needs to have clear price goals or timelines where you will exit your positions. When you have a well-defined exit strategy already in place, you’ll be less likely to make knee-jerk emotional decisions when the market experiences downturns.
Final Thoughts on Market Trends
The NFT market’s recent downturn underscores the need to recognize when a market cycle has changed and adjust investment approaches to the current climate. While this might sound alarming, it’s important to bear in mind that every market goes through boom and bust cycles. Through education and adherence to strategy, investors can work through these cycles and set themselves up for enduring success.
Origin of the terms "bull" and "bear" markets
While these labels may sound modern, the use of the terms “bull” and “bear” markets have a long history in the financial world. We don’t know for certain where these terms came from. Perhaps the most well-known explanation is derived from just how these animals launch their attacks. Bulls stabbing their horns into the sky represent bullish, or rising prices and bears swiping their paw downward are meant to show bearish, or falling prices.
Predictions for the next crypto bull run
Speculating on when and how big the next crypto bull run will be is the quintessential question. As many forecasts predict, so too will the next bull market break away to the upside. They partially credit this potential growth to greater institutional adoption, the creation of new blockchain technologies, and the emergence of DeFi and NFTs.
Current status of the crypto market: Bull or Bear?
The crypto market appears to be turning a corner and regaining bullish momentum after several months of bearish consolidation. While we can’t know for certain just yet whether a new bull market has started, the basics are certainly encouraging. A number of signs indicate that the market is poised for even more expansion.
Recommended actions during a crypto bull run
When the next crypto bull run comes, stay disciplined and don’t lose your head like everyone else. Some recommended actions include:
- Setting realistic profit targets: Don't get greedy and risk losing your gains.
- Taking profits along the way: Gradually sell off a portion of your holdings as prices rise.
- Reinvesting strategically: Use your profits to diversify your portfolio or invest in promising new projects.
Caution is the Better Approach for Now
In 2022 the Art NFT market experienced a significant correction. The median unit price of an Art NFT dropped by 20%, dropping to $35. Today, in 2023, we are living the first significant correction of that hot housing market. This turn from rampant speculation to extreme caution cut the number of active traders down to just 282,683. SuperRare is known for its one-of-a-kind digital art collectibles. Very recently, it has suffered a spectacular 94% crash in trading volume and an incredible 98% plunge in sales. The recession lasted until 2023 and 2024. Trading volume fell off a cliff—a staggering 93% from its all-time high, plummeting to only $197 million, with the number of active traders evaporating to just 76,176 by EOY 2024. By Q1 2025, only 19,575 of those traders were still active. At the same time, trading volume crashed, down 93% to just $23.8 million, nearly on par with pre-boom levels. As 2024 approaches, the top 20 most traded Art NFT collections from 2021 have experienced a jaw-dropping drop. They have all experienced an average decrease of 95% in trading volume and sales. Total trading volume was down 19% year-over-year to $2.38 billion, even with sales count rising 31% year-over-year to 1.91 million. The trend continued into 2023 and 2024, resulting in ever-deepening losses. That’s because trading volume crashed by a jaw-dropping 93%, falling to just $197 million at its all-time high. Cut to Q1 2025—volume’s plummeted 93% to $23.8 million, and active traders just aren’t there anymore. Even with these drastic declines, these Art NFT projects are still going strong and still helping thousands of new users discover art NFTs on NFT Art Rankings.
These statistics paint a clear picture: the initial NFT hype has subsided, and the market is undergoing a significant correction. Trading volume, sales, and the number of active traders have tanked. Still, this sharp drop shows that the speculative mania that was driving the market in 2021 has mostly gone up in smoke. He clarified that some projects are still active. The story overall is one that calls for caution and a questioning eye when considering investing in NFTs.
Should You Invest $1,000 in Ethereum Right Now?
The answer to the question of whether to invest in Ethereum is not a simple yes or no. Ethereum made the switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in 2022, cutting its energy use by more than 99.9%. Art NFTs initially soared to stardom on Ethereum in 2020, with total trading volume of $28.7 million and more than 101,000 sales. The average Art NFT price on Ethereum hit a high of $2,044 in 2021.
Even though Ethereum is still the leading blockchain for NFTs and decentralized applications, the new bear market requires us all to be careful. Given the general downturn in the NFT market, along with other economic factors, a wait and see approach might be the safest course of action. Disclaimer Investors need to be mindful of their own financial circumstances and do ample research before investing in anything.
This is Not Unambiguously Positive News
Bitcoin NFTs, or Ordinals, are taking the world by storm. Their average prices surged 896%, increasing from $63 in 2023 to $633 in Q1 2025, propelled by an increase in collector demand for Bitcoin-backed digital art. As we move further into 2025, NFTs are proving to be so much more than digital art collectibles. Community and social features, like exclusive creator drops, voting features, and NFT staking are powering customer retention and cultivating passionate communities.
This recent rise in Bitcoin NFT prices is unprecedented. Let’s take a step back and look at this trend in the greater context of the overall market. The Bitcoin NFT market is still very nascent to say the least compared to the Ethereum NFT market. We still have an outstanding question as to its long-term sustainability. The increased attention being given to community and social features within new NFT projects is an encouraging turn. Even with improvements, it is unclear whether these additions could make up the difference in a bigger market decline. Investors should carefully evaluate the risks and potential rewards before investing in any NFT project, regardless of the underlying blockchain or community features.
