AI and big data crypto projects and tokens are suffering losses, reflecting a market lacking a clear direction. As a result, the broader altcoin sector is in turmoil as traders eagerly await signals from Bitcoin.
A new analysis suggests that the dominance of the world’s largest cryptocurrency is increasing, which is holding back altcoin profits. A decrease in its dominance may come as a huge relief for the alts.
Altcoin Rally Ahead?
Glassnode founders ‘Negentropic’ observed that Bitcoin’s dominance in the market is currently rising, which has been suppressing the gains of altcoins.
However, a potential decline in Bitcoin’s dominance could trigger significant rallies among altcoins. Notably, POWR, FTT, and NMR have emerged as top performers among the lot. Bitcoin’s recent surge from a horizontal support level has further boosted momentum in the market.
“Will AI super-boost AI Altcoins? BTC dominance is on the rise, suppressing altcoin gains. A decline in BTC dominance could ignite significant altcoin rallies.”
Looking ahead, AI altcoins are expected to be in the spotlight over the coming month, driven by key events such as NVIDIA’s earnings report on May 22, Apple’s WWDC on June 10, the potential launch of ChatGPT 5, the emergence of a GPT-based search engine, and Google’s I/O event, which just took place.
These catalysts could significantly influence market sentiment and drive interest and investment in AI-focused cryptocurrencies.
At its annual I/O developer conference earlier this week, Google released Project Astra, which is capable of providing real-time responses to user queries using text, audio, or video inputs. With this, the tech giant’s move aims to solidify its dominance over the recent surge in generative AI technologies.
Despite Google’s new introduction, AI tokens have failed to rally. Data compiled by CoinGecko shows major AI tokens’ lackluster performance throughout the week, with only a handful of them in the green.
VC Investments in Artificial Intelligence (AI)
Web3 and Artificial Intelligence (AI) became leading investment areas in blockchain startups in 2023, securing over 11% of total VC funding in the sector.
This is evident in Stan Miroshnik’s report at TenSquared (10SQ), which revealed that VC investments in Web3 and AI startups exceeded $637 million last year.