NFT sector shrinks 12% in week amid ETH price correction
The non-fungible token (NFT) market saw a steep drop of more than $1.2 billion in valuation over the past week, as Ethereum’s recent rally showed signs of cooling.
According to NFT Price Floor data on Monday, the market capitalization of NFT collections fell to $8.1 billion — down 12% from Wednesday’s $9.3 billion, which had earlier benefited from a 40% rally since July, reports Cointelegraph.
The decline closely mirrors Ether’s own drop of approximately 9%, with ETH falling from around $4,700 to $4,260 at the time of reporting. Since most NFTs are priced in ETH, such fluctuations directly impact the dollar-denominated value of collections. The decline is also reflected in the reduced activity and pricing across top-tier NFT projects.
Leading collections hit hard by valuation drop
CryptoPunks, the top NFT collection by market cap, lost approximately $300 million in value, falling from $2.4 billion to $2.1 billion — a 12% weekly decline. Sales activity also weakened, with CryptoSlam data indicating just 51 sales over the last seven days, down 28%, and a 34% drop in volume to $12.7 million.
The Bored Ape Yacht Club (BAYC) suffered even more severely, shedding nearly 20% of its value as its market cap slid from $602 million to $482.3 million. Pudgy Penguins, while losing $100 million in value, managed to overtake BAYC to become the second-most valuable collection, now holding a market cap of $491 million. The reshuffling among top collections suggests that market sentiment is shifting even within the blue-chip NFT segment.
Institutional attention and ETH volatility drive uncertainty
The sharp fall in NFT valuations demonstrates the sector’s heavy dependence on Ethereum’s price movements. ETH lost 4% in just 24 hours, dragging down nearly all major NFT projects, given that most assets are minted and transacted on the Ethereum blockchain. Despite the slump, institutional engagement with NFTs appears to be gaining traction — BTCS Inc., a publicly listed blockchain firm, recently added three Pudgy Penguins NFTs to its treasury.
This suggests growing acceptance of NFTs as alternative assets for portfolio diversification. Still, the ongoing volatility in ETH and broader macroeconomic concerns may continue to weigh on sentiment in the short term. The NFT market may remain under pressure unless ETH stabilizes or resumes its upward trajectory.
Recently we wrote that Bitcoin and Ethereum began mid-August trading with elevated volatility, reflecting a complex mix of technical signals, institutional activity, and historical cycle dynamics.
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