Stop just looking at floor prices! Five indicators to judge whether an NFT project remains competitive

When evaluating the value and health of a project in today's NFT market, most people tend to focus on the floor price. Today, NFT trader Matty shared 5 indicators on Twitter for investors to conduct a more in-depth assessment of projects beyond just the floor price.

Evaluating Five Metrics for NFTs

If your metric of health valuation for NFT projects is only Floor price, you’re doing it wrong.

Here’s 5 more metrics to assess deeper.

— Matty (@DCLBlogger) April 13, 2022

1. Depth of Order Book

Using the example in the chart, the floor price of an NFT is 0.55 ETH, but if there is consistent daily sales, after 4 transactions, the floor price could rise to nearly 1 ETH.

When observing the floor price, it is important to also analyze the order book to see if the orders near the floor price are scattered or concentrated.

2. Continuous Daily Trading Volume

If there is consistent trading volume for several months or even years, price increase is only a matter of time.

Before making larger investments, Matty mainly observes the trading volume and the floor price mentioned earlier to make judgments and attempt to predict price trends.

3. Distribution of Holders

Continuous turnover trading helps eliminate whales or speculators looking to exit. Once they have sold off, the project will become healthier and selling pressure will decrease.

If a project has many BAYC whales among its holders, the project's health may be higher.

4. Daily Number of Orders

In addition to daily transaction volume, the daily order volume is also a significant indicator. If the daily addition of orders gradually decreases while the trading volume increases, it is a healthy sign for the project. It indicates that most holders are unwilling to sell, and market demand continues to increase.

Conversely, if the market's daily order volume continues to increase while the trading volume decreases, it indicates that most people are eager to sell, and the project's prospects are not favorable.

5. Age of the Project

In this market where attention is key, a project that wants to remain competitive a year after its launch needs to exert a considerable amount of effort. This means they are on the right track to continue attracting market demand and maintaining trading volume.

A stable, mature project is more attractive compared to a new project that has only been launched for two months.