AI Cryptos Suffer Major Losses, But Analysts Predict 2025 Altcoin Rally Could Revive Market

AI-focused cryptocurrencies have recently experienced a significant downturn, losing nearly a third of their combined market value despite earlier predictions that 2025 could usher in a strong altcoin season fueled by crypto-friendly regulations.

At the time of writing, the total market capitalization of AI tokens was around $50.5 billion, reflecting a decline of more than 28% from their December 7 peak of $70.4 billion. Alongside this drop, the total trading volume for AI cryptocurrencies also fell, dropping almost 11% over the past month to $4.73 billion, signaling waning trader interest.

This 30% decrease in AI crypto values comes amid broader market struggles, as Bitcoin (BTC) dropped more than 14% from its record high above $108,000 in mid-December.

Despite these setbacks, many analysts remain hopeful about a potential altcoin rally in 2025. This altcoin season, often triggered by Bitcoin’s decreasing dominance, could see profits from Bitcoin flow into smaller tokens, including those in the AI space.

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The anticipated altcoin season may begin in early 2025, according to technical trader Elja, who noted the presence of fractal patterns that suggest a shift in market dynamics. These patterns, used by traders to predict support, resistance, and potential trend reversals, indicate a favorable environment for smaller cryptocurrencies.

Alexander Zdravkov