Nvidia’s ‘Death Cross’ Sparks Concerns for AI Crypto Tokens
Nvidia’s stock exhibits a ‘death cross’ signal, suggesting a potential decline of up to 47%. Despite this, several AI crypto tokens like Render and Bittensor have gained value. Analysts express concerns that only AI tokens with true utility will survive in a cooling market, while recent surveys indicate a bullish outlook for the sector. Former Binance CEO advises focusing on practical utilities rather than token proliferation.
Nvidia’s stock has recently formed a ‘death cross,’ indicating a potential decline, as observed by market data platform Barchart. This bearish signal appears when the 50-day SMA dips below the 200-day SMA, prompting concern about a possible 47% drop in stock value over the next six months. Given Nvidia’s influence on AI crypto tokens, such a signal raises questions regarding the future performance of this sector.
Despite the bearish indicator from Nvidia, certain AI crypto tokens have experienced increases. For instance, Render (RENDER) has risen by 4.06%, while Bittensor (TAO) and Artificial Superintelligence Alliance (FET) reported gains of approximately 2.88%, as per CoinMarketCap data. This reaction emphasizes that although Nvidia’s stock has potential implications for AI tokens, correlations are not consistently evident.
Nvidia’s stock has been pivotal for AI crypto traders. Analysts have observed instances where AI tokens surged, reflecting Nvidia’s stock performance, particularly during its rally preceding the Q2 earnings in 2024. Contrastingly, some traders expressed disappointment when Nvidia’s substantial Q1 revenue increase did not impact AI crypto token prices as expected, leading to speculation about a market bubble.
Some crypto analysts suggest that only AI tokens with practical applications will flourish while the hype surrounding AI diminishes. As CryptoCosta noted, the focus should shift to tokens that provide market solutions and generate revenue. In the last month, market capitalization for top AI and big data tokens fell by 23.70%.
Near Protocol (NEAR), the leading token in this segment, has experienced a nearly 59% retracement in the past year, currently priced at $2.70. Conversely, a recent survey indicates optimism among investors; 25% of the 2,632 respondents surveyed by CoinGecko between February and March expressed being “fully bullish” on AI crypto token prices by 2025.
Changpeng “CZ” Zhao, former CEO of Binance, highlighted a pragmatic viewpoint regarding utility in crypto: “While crypto is the currency for AI, not every agent needs its own token.” He advised focusing on existing cryptos for fees unless substantial scale warrants the launch of new tokens. An investment report by Sygnum further noted that while AI agents show promise, they have yet to demonstrate value beyond speculation.
In summary, Nvidia’s recent formation of a ‘death cross’ raises concerns regarding its stock performance and potential repercussions for the AI crypto sector, although some tokens are currently gaining. Despite fluctuating sentiments among traders, optimism remains, with survey results indicating a bullish outlook for AI crypto tokens. However, it is essential to prioritize tokens with genuine utility, as emphasized by industry experts. Traders and investors alike must navigate this volatile landscape with caution and strategic foresight.
Original Source: cointelegraph.com
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