Cryptocurrency

AI Token Market Cap Falls 28% From $70 Billion December Peak

ChainVerse January 6, 2025

Despite optimistic expectations of an incoming altcoin season driven by more crypto-friendly regulations during 2025, artificial intelligence (AI) cryptocurrencies have shed nearly one-third of their cumulative value.

Table of Contents

Market Capitalization Decline

The cumulative market capitalization of AI cryptocurrencies stood at $50.5 billion as of 7:15 a.m. in UTC, down over 28% from their peak of $70.4 billion recorded on December 7, CoinMarketCap data shows.

Cumulative Trading Volume Decrease

Cumulative trading volume around AI tokens also experienced a decline, falling nearly 11% during the past month to the current $4.73 billion, suggesting that trader interest in AI cryptocurrencies decreased.

Market Trends

The near 30% drop in AI-based cryptos occurred during a wider crypto market downtrend, which saw Bitcoin’s price experience an over 14% correction from its all-time high of above $108,000 on December 17, according to data from Cointelegraph Markets Pro.

BTC/USD Price Chart

| Date | Price |
|————-|———-|
| Dec 7 | $114,234 |
| Jan 5 | $97,124 |

Altcoin Season Expectations

Increasingly more analysts are expecting an incoming altcoin season during 2025, which could see Bitcoin profits flow into smaller cryptocurrencies, including AI tokens.

Can Altseason Lift AI Cryptos in 2025?

Altcoin season, or altseason, tends to benefit from Bitcoin’s declining market dominance, which often means that investors are taking profit from their BTC positions and investing part of these funds into altcoins.

Crypto Market Flow

| Date | Total Crypto Market Cap (ex-BTC) |
|————-|———————————–|
| Dec 7 | $2.5 trillion |
| Jan 5 | $2.1 trillion |

Fractal Patterns

Total crypto market cap excluding BTC. 1-month chart. Fractals. Source: Elja Boom

In crypto trading, technical traders use price fractal patterns to identify key support and resistance levels and potential trend reversals based on historical data.

Altcoin Season Timeline

The 2025 altcoin season may start during the first quarter of 2025, based on fractal patterns shared by popular crypto trader Elja, who wrote in a December 27 Xpost: ‘A few more weeks before mega altseason…’

Technical Analysis

| Date | Price |
|————-|———-|
| Dec 7 | $2.1 trillion |
| Jan 5 | $1.9 trillion |

Ether (ETH) Price Rally

Ether ETH price could also benefit from the altcoin rally and recapture its previous all-time high.

Short-Term Ether Price Predictions

While some analysts foresee an Ethereum rally to $5,000 in the short term, others are predicting an ‘impulse breakout’ to $15,000 by the end of 2025.

Bitcoin (BTC) Price Chart

| Date | Price |
|————-|———-|
| Dec 7 | $114,234 |
| Jan 5 | $97,124 |

Altcoin Season Implications

The altcoin season may bring a fresh wave of investment into smaller cryptocurrencies, including AI tokens. This could lead to increased trading volume and market capitalization for these assets.

Conclusion

Despite the decline in value, analysts are optimistic about the potential for an incoming altcoin season during 2025. As the crypto market continues to evolve, it will be essential to monitor market trends and fractal patterns to identify key support and resistance levels.