The market for artificial intelligence (AI) cryptocurrencies has seen a sharp decline, shedding nearly one-third of its value since December. Despite this downturn, analysts remain optimistic about a potential recovery during the anticipated 2025 altcoin season.
Market Capitalisation Drops to $50.5 Billion
As of 7:15 a.m. UTC, the cumulative market capitalisation of AI cryptocurrencies stood at $50.5 billion, marking a 28% decline from its peak of $70.4 billion on December 7, according to data from CoinMarketCap. Trading volumes around AI tokens have also seen a significant dip, dropping nearly 11% over the past month to $4.73 billion. This decline reflects waning trader interest in the AI cryptocurrency sector.
The downturn in AI-based cryptocurrencies has occurred within the context of a broader crypto market slump. Bitcoin (BTC), the leading cryptocurrency, experienced a correction of over 14% from its all-time high of $108,000 on December 17, according to Trading view.
2025 Altcoin Season Offers Hope
Despite the recent struggles, analysts are predicting a resurgence for AI cryptocurrencies during the 2025 altcoin season. Altcoin season, or “altseason,” typically occurs when Bitcoin’s market dominance declines, prompting investors to diversify into smaller cryptocurrencies, including AI tokens.
Popular crypto trader Elja shared an optimistic outlook in a December 27 post on social media platform X, stating, “A few more weeks before mega altseason.” According to fractal patterns—a technical analysis method that uses historical data to predict future trends—the first quarter of 2025 could mark the beginning of a significant altcoin rally.
Ethereum to Lead the Altcoin Charge?
Ethereum (ETH), the second-largest cryptocurrency, is also poised to benefit from the anticipated altcoin season. Some analysts predict that ETH could recapture its previous all-time high of $5,000 in the short term, with more bullish forecasts suggesting an “impulse breakout” to $15,000 by the end of 2025.
While the AI cryptocurrency sector faces challenges, the anticipated altseason could reinvigorate investor interest. With more crypto-friendly regulations expected to emerge, the coming year may present opportunities for a strong recovery across the altcoin market, including AI-focused tokens.
