The monthly trading volume of LooksRare, a decentralized non-fungible token (NFT) and digital collectible marketplace, has fallen 97%, crashing 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’s monthly volume decline drops to $2.1 million in October
The unprecedented drop in activity could not be attributed to any specific LooksRare-related event as of writing on October 26. This contraction comes despite the recovery of the broader cryptocurrency market and is rising as evidenced by the welcome expansion of leading assets including Bitcoin (BTC) and Ethereum (ETH).
Monthly volume has been steadily declining since April 2023, according to trackers. Then the average volume exceeded $150 million, indicating increasing interest, especially from traders. At that time, it should be noted that most crypto assets also grew.
Specifically, Bitcoin broke higher and hit $30,000, stoking demand and reviving hopes that the market could bounce back from its collapse in 2022. From June through September, average monthly volume in LooksRare more than halved before falling to less then $3 million in 2022. October 2023.
The peak in monthly trading activity in April came together with the release of LooksRare v2, where the platform’s developers reduced trading fees by 75% from 2% to 0.5%. The updated version is also more gas efficient, allowing traders to save up to 30% on gas compared to the previous edition. Additionally, because LooksRare allows merchants to place bulk orders when buying or selling, monthly volume rose rapidly in April.
NFT Bull Run Postponed, Will LOOKS Break the Resistance Line?
With activity rapidly declining, LOOKS, LooksRare’s native token, is also flat looking at price action. The token is trading around the $0.070 level at spot prices, retesting the August highs. However, an inverted hammer suggests that upside momentum could weaken, and bears could reverse gains.
Despite concerns, LOOKS is up 60% from its low in the second half of 2023 and could still rise in the coming months. Looking at the candlestick arrangement in the daily chart, a close above $0.070 with growing volumes could get the ball rolling for buyers who expect the token to retest the 2022 lows at around $0.12.
Overall, trading activity in NFT and digital collectibles remains relatively low, even as bullish traders expect prices to reverse and rise again in 2024. Recently, there was a brief rise in the rock bottom prices of leading NFT collections such as 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 likelihood of an NFT bull run from the fourth quarter of 2023.
Feature image from Canva, chart from TradingView