How legitimate that trading is is not possible to know (e.g. people trading stuff back and forth to make it look like there is activity).
Person A gets NFT for 1 ETH. They sell it to person B for 1.2 ETH
Person B is able to spend 1.2 ETH because they traded 2 ETH worth of NFT to Persons C, D, E for 3.2 ETH total
Persons C, D, E are yesterdays Person A
etc.
People are "trading up" but only because the total number of trades are increasing. Some people are probably successful in hopping into this wave, converting a profit, and hopping out.. but they are only able to do that because the majority of activity is still running the engine. Eventually the engine will run out of fuel and a lot of people will be stuck with net negative accounts
I'm also 90% sure that most of the bigger players in the space are aware of this and are effectively competing to see who's left holding the bag