Despite optimistic expectations of an incoming altcoin season driven by more crypto-friendly regulations in 2025, artificial intelligence (AI) cryptocurrencies have shed nearly one-third of their cumulative value.
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 Dec. 7, according to CoinMarketCap data.
AI Cryptocurrencies Market Capitalization
| Date | Cumulative Market Capitalization |
| — | — |
| Dec 7 | $70.4B |
| Jan 7 | $50.5B |
Trading Volume Decline
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.
Cumulative Trading Volume
| Date | Cumulative Trading Volume |
| — | — |
| Dec 7 | $5.25B |
| Jan 7 | $4.73B |
Wider Crypto Market Downtrend
The near 30% drop in AI-based cryptos occurred during a wider crypto market downtrend, which saw Bitcoin (BTC) price experience an over 14% correction from its all-time high of above $108,000 on Dec. 17, according to data from Cointelegraph Markets Pro.
BTC/USD Price Chart
| Date | BTC/USD Price |
| — | — |
| Dec 17 | >$108,000 |
| Jan 7 | ~$93,000 |
Incoming Altcoin Season
Increasingly more analysts are expecting an incoming altcoin season during 2025, which could see Bitcoin profits flow into smaller cryptocurrencies, including AI tokens.
Crypto Market Flow
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 Dec. 27 Xpost:
"A few more weeks before mega altseason…"
Total Crypto Market Cap Excluding BTC
| Date | Total Crypto Market Cap (Excluding BTC) |
| — | — |
| Jan 7 | ~$450B |
Altcoin Season and AI Cryptos
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 Trading Strategies
In crypto trading, technical traders use price fractal patterns to identify key support and resistance levels and potential trend reversals based on historical data.
AI Token Potential
Ether (ETH) price could also benefit from the altcoin rally and recapture its previous all-time high. While some analysts foresee an Ether rally to $5,000 in the short term, others are predicting an ‘impulse breakout’ to $15,000 by the end of 2025.
ETH Price Chart
| Date | ETH/USD Price |
| — | — |
| Jan 7 | ~$3,500 |
| Jan 1 | ~$2,500 |
Conclusion
The decline in AI cryptocurrency market capitalization and trading volume may indicate decreased trader interest in these assets. However, the incoming altcoin season could bring new life to these tokens, potentially leading to a significant price increase.
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