Artificial Intelligence (AI) cryptocurrencies are currently experiencing a slump in the market, down nearly a third from optimistic forecasts. A more amenable regulatory environment for cryptocurrencies was anticipated for 2025, fuelling hopes of an impending ‘altcoin’ season. Nevertheless, AI cryptos have seen their market capitalization take a downswing of over 28% from a December peak of $70.4 billion.
Trading volumes in AI tokens, too, have taken a hit, with an 11% decline experienced in the last month. This downturn points to a reduced trader interest in AI cryptocurrencies. Moreover, this drop coincides with a broader market downtrend, with Bitcoin registering an over 14% correction from its all-time high.
Despite the current crypto winter, seasoned analysts foresee a potential rebound. The altcoin market, which covers smaller cryptocurrencies including AI tokens, is predicted to enter a bullish phase during the first quarter of 2025. Respected cryptocurrency trader Elja suggested recently that a ‘mega altseason’ could be mere weeks away. This suggestion is based on the fractal pattern of crypto trading, with technical traders using these patterns to identify potential trend reversals based on previous data.
Furthermore, if this predicted altseason materializes, Ethereum could also find itself on the receiving end of a price hike, potentially reaching its previous peak. Some analysts are predicting a short-term Ether rally to $5,000, while others anticipate a more dramatic rise to $15,000 by the end of 2025. Excitement mounts as traders and investors wait to see if these predictions become reality, paving the way for other cryptocurrencies, such as AI coins, to follow suit.