Market Doldrums: Cryptocurrency and NFT Markets Slide in Tandem

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The global digital asset landscape is navigating choppy waters as both cryptocurrency and NFT markets reflect broader financial headwinds. With investors reacting to signals of further interest rate hikes, risk-off sentiment has taken hold—pushing crypto and NFT valuations downward in sync with traditional equity markets.

Bitcoin, the flagship digital currency, has dipped below $34,000, marking its lowest level in nearly four months and representing the weakest point since January. This drop brings its year-to-date loss to approximately 30%, and a staggering 50% decline from its all-time high of $67,800 reached in November 2021. Ethereum has followed a similar trajectory, slipping beneath the $2,500 mark with over 3% depreciation in the past 24 hours alone.

According to data from CoinGecko, the total global cryptocurrency market capitalization has contracted by more than 2% within a single day, now sitting at $1.65 trillion. This broad-based pullback underscores growing investor caution amid tightening monetary policies and macroeconomic uncertainty.

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NFT Sector Faces Parallel Decline

The downturn isn't isolated to cryptocurrencies. The NFT (non-fungible token) market is also experiencing significant pressure across major collections.

Data from NFTGo.io reveals steep declines in trading volume over the last 24 hours:

At the time of reporting, Azuki’s floor price stood at 20.95 ETH—a 4.2% decrease over 24 hours. Meanwhile, the prestigious Bored Ape Yacht Club (BAYC) saw its floor price fall below 100 ETH for the first time in months, settling at 96 ETH with a sharp 13.67% drop.

These metrics highlight weakening demand and reduced speculative activity in the NFT space, traditionally driven by community engagement and perceived scarcity. As liquidity dries up, even blue-chip projects are not immune to market corrections.

Bear Market Confirmed: Mayer Multiple Signals Continued Downturn

Glassnode, a leading blockchain analytics firm, recently reaffirmed that the crypto market remains firmly entrenched in a bear phase—using the widely respected Mayer Multiple indicator.

The Mayer Multiple is calculated as the ratio between Bitcoin’s current price and its 200-day moving average. Despite its simplicity, it has historically provided reliable signals for identifying cyclical market bottoms and tops.

Glassnode identifies a Mayer Multiple of 0.8 as a threshold for “historically undervalued” conditions. Only about 15% of Bitcoin’s trading history has occurred at or below this level, making it a significant support zone. Given that the 200-day moving average currently stands at $47,275, the corresponding undervaluation threshold sits at **$37,820**.

Bitcoin’s current price—hovering around $34,600—is already below this level, suggesting the market may have entered the latter half of the bear cycle. However, historical patterns indicate that while the deepest capitulation may be behind us, sustainable recovery requires renewed demand and institutional inflows, neither of which are yet evident.

Technical Outlook: Can Bitcoin Hold Key Support?

Carter Braxton Worth, founder of Worth Charting, warns of further downside risk. He projects Bitcoin could fall another 13%, potentially testing the $30,000 level. This projection aligns with technical support observed in mid-2021 when Bitcoin hovered near $29,000.

With Bitcoin already down $1,200 in recent sessions, this psychological and technical benchmark may soon be tested. If breached, it could trigger additional selling pressure from leveraged positions and algorithmic trading systems.

One of the primary catalysts for this risk-averse behavior is the Federal Reserve’s ongoing rate hikes. As yields on fixed-income assets rise, alternative investments like Bitcoin face increased scrutiny. Unlike dividend-paying stocks or bonds, Bitcoin offers no cash flow—making it less attractive during periods of high interest rates.

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Institutional Absence: A Missing Pillar of Stability

Kevin O'Leary, investor and star of the TV show Shark Tank, points to a critical gap in market structure: the absence of sovereign wealth fund participation.

“Bitcoin remains in a very tight buy-sell range,” O'Leary noted, emphasizing that ownership is still concentrated among retail traders, high-net-worth individuals, hedge funds, and specialized crypto funds. Notably absent? Sovereign wealth funds.

No major national wealth fund currently holds Bitcoin in its reserves. This lack of institutional backing means there’s no stabilizing buyer during sharp sell-offs. In contrast, traditional markets often see central banks or large public funds step in during downturns to restore confidence.

O'Leary believes even a 1% allocation by a few major sovereign funds could dramatically shift market dynamics—injecting liquidity, boosting credibility, and potentially accelerating adoption across other institutional players.

Core Keywords

Frequently Asked Questions (FAQ)

Q: Is the current crypto downturn part of a normal market cycle?
A: Yes. Historical data shows that after periods of rapid growth, cryptocurrencies typically enter extended correction phases known as bear markets. The current environment aligns with past cycles, especially when viewed through indicators like the Mayer Multiple.

Q: What is a healthy floor price for major NFTs like Bored Ape Yacht Club?
A: There's no fixed "healthy" floor price—it depends on community activity, utility, and market sentiment. However, sustained drops below key thresholds (e.g., 100 ETH for BAYC) can signal weakening confidence and reduced liquidity.

Q: Why does the Mayer Multiple matter for long-term investors?
A: It helps identify extreme undervaluation or overvaluation zones. When Bitcoin trades significantly below its 200-day average (Mayer Multiple < 0.8), it often precedes long-term buying opportunities.

Q: Could rising interest rates permanently hurt crypto adoption?
A: Not necessarily. While higher rates make non-yielding assets less attractive in the short term, many investors view Bitcoin as digital gold—a hedge against inflation and currency devaluation over the long run.

Q: Are NFTs still a viable investment during a bear market?
A: For select blue-chip collections with strong communities and real-world utility, yes. However, speculative NFTs without clear value propositions are most vulnerable during downturns.

Q: When might institutional investors enter the market more aggressively?
A: Increased participation is likely contingent on clearer regulations, improved custody solutions, and macroeconomic stabilization—especially around interest rate policy.

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Final Thoughts

While the current climate appears bleak, seasoned observers see opportunity beneath the surface. The crypto winter continues, but signs suggest we may be moving from the early panic phase into the slower grind of capitulation and consolidation.

For investors, this period demands patience and discipline. Market fundamentals—such as network security, developer activity, and layer-two innovation—remain strong despite price volatility. Meanwhile, NFT ecosystems are evolving beyond art into gaming, identity, and decentralized social platforms.

As history has shown, the most resilient projects emerge stronger after bear markets end. The question isn’t whether recovery will come—but whether investors are positioned to act when it does.