The monthly trading volume of LooksRare, a decentralized marketplace for non-fungible tokens (NFTs) and digital collectibles, has dropped by 97%, from $71.9 million recorded in September 2023 to just $2.1 million in October. Token Terminal Data shared by Web3 Academy on October 26, via X shows.
LooksRare Monthly Volume Drops to $2.1 Million in October
The unprecedented drop in activity could not be attributed to any particular event related to LooksRare when I wrote on October 26. This contraction comes even though the broader cryptocurrency market is recovering, surging as seen in the welcome expansion of major assets including bitcoin (btc) and ethereum (eth).
According to trackers, the monthly volume has been steadily falling since April 2023. Then, the average volume exceeded $150 million, indicating growing interest, especially from traders. At that time, it is worth noting that most crypto assets were also growing.
Specifically, bitcoin rose, reaching $30,000, triggering demand and reviving hopes that the market would rally again after the 2022 crash. From June to September, average monthly volume on LooksRare had dropped to more than the half before falling to less than $3 million in October 2023.
The increase in monthly commercial activity in April agreed with the launch of LooksRare v2, in which the platform developers reduced trading fees by 75%, from 2% to 0.5%. The updated version is also more gas efficient, allowing merchants to save up to 30% on gas compared to the previous edition. Additionally, since LooksRare allows traders to place bulk orders when buying or selling, monthly volume increased rapidly in April.
nft Bull Run Postponed, Will LOOKS Break Resistance Line?
With activity contracting rapidly, LOOKS, LooksRare’s native token, has also stalled, watching the price action. The token is trading around the $0.070 level at spot exchange rates, retesting August highs. However, an inverted hammer suggests that the uptrend momentum could wane and the bears could reverse the gains.
Despite the concerns, LOOKS is up 60% from the H2 2023 lows and may still recover in the coming months. Looking at the candle layout on the daily chart, a close above $0.070 with expanding volumes could set in motion buyers who expect the token to retest the 2022 lows around $0.12.
Overall, nft and digital collectible trading activity remains relatively low, even as bullish traders expect prices to turn around and rebound in 2024. Recently, there was a brief spike in the floor prices of major nft collections like Bored Ape Yacht Club (BAYC), Azuki and CryptoPunk. However, with trading volume and the number of new owners still at record lows, researchers have postponed the possibility of an nft bull run starting in the fourth quarter of 2023.
Featured image from Canva, TradingView chart
