Despite the 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. The collective market capitalization of AI cryptocurrencies has plummeted over 28% from its peak of $70.4 billion recorded on December 7, according to data from CoinMarketCap.
Market Capitalization and Trading Volume
The cumulative market capitalization of AI cryptocurrencies stood at $50.5 billion as of 7:15 a.m. in UTC. This significant decline suggests that investor confidence in these digital assets has waned. The trading volume around AI tokens also experienced a decrease, falling nearly 11% during the past month to the current $4.73 billion. This reduction in trading activity indicates a decrease in trader interest in AI cryptocurrencies.
AI Cryptocurrencies Market Capitalization: A 1-Month Chart
[Image description: A chart displaying the cumulative market capitalization of AI cryptocurrencies over the past month, showing a decline from its peak on December 7.]
Source: CoinMarketCap
A Broader Crypto Market Downtrend
The near 30% drop in AI-based cryptos occurred during a wider crypto market downtrend. Bitcoin’s (BTC) price experienced 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: A 1-Month Chart
[Image description: A chart displaying the price movement of Bitcoin over the past month, showing a decline from its all-time high.]
Source: Cointelegraph
Incoming Altcoin Season in 2025?
Increasingly more analysts are expecting an incoming altcoin season during 2025. This phenomenon 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 smaller cryptocurrencies, including AI tokens.
Altcoin Season: A Catalyst for Growth
[Image description: An illustration depicting the flow of capital during an altcoin season.]
Source: Rekt Capital
The 2025 altcoin season may start during the first quarter of 2025, based on fractal patterns shared by popular crypto trader Elja. According to their post on December 27:
"A few more weeks before mega altseason…"
Fractals and Market Patterns
Technical traders use price fractal patterns to identify key support and resistance levels and potential trend reversals based on historical data.
Total Crypto Market Cap Excluding BTC: A 1-Month Chart
[Image description: A chart displaying the total market capitalization of cryptocurrencies excluding Bitcoin over the past month, showing a decline.]
Source: Eljaboom
Can Altseason Lift AI Cryptos in 2025?
While some analysts foresee an Ether (ETH) rally to $5,000 in the short term, others are predicting an ‘impulse breakout’ to $15,000 by the end of 2025.
A Rally for Ethereum and Other Altcoins
Ether’s price could also benefit from the altcoin rally and recapture its previous all-time high. The potential for growth in these smaller cryptocurrencies is significant, especially if investors begin to rotate their capital into AI tokens as part of an incoming altcoin season.
In Conclusion
The decline in AI cryptocurrency market capitalization and trading volume is a cause for concern. However, with the anticipation of an incoming altcoin season, there may be opportunities for growth in these digital assets. As analysts continue to monitor market trends and fractal patterns, investors should remain cautious but prepared for potential rallies in the coming months.
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