Despite the optimistic expectations of an incoming altcoin season driven by more crypto-friendly regulations in 2025, artificial intelligence (AI) cryptocurrencies have lost nearly one-third of their cumulative value.
As of 7:15 a.m. UTC, the cumulative market capitalization of AI cryptocurrencies stood at $50.5 billion, down over 28% from their peak of $70.4 billion recorded on December 7, according to data from CoinMarketCap [1].
AI Cryptocurrencies Market Capitalization: A Steep Decline
The following chart illustrates the decline in AI cryptocurrency market capitalization over the past month.
AI Cryptocurrencies Market Capitalization (1-Month Chart)
Source: CoinMarketCap
As shown in the chart, the cumulative trading volume around AI tokens also experienced a significant decline, falling nearly 11% during the past month to the current $4.73 billion. This suggests that trader interest in AI cryptocurrencies has decreased.
Decline of AI-Based Cryptos Amidst 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 December 17, according to data from Cointelegraph Markets Pro [2].
BTC/USD: 1-Month Chart
Source: Cointelegraph
Analysts Expect Incoming Altcoin Season in 2025
Increasingly more analysts are expecting an incoming altcoin season during 2025, which could see Bitcoin profits flow into smaller cryptocurrencies, including AI tokens.
What is Altcoin Season?
Altcoin season, or altseason, tends to benefit from Bitcoin’s declining market dominance. This often means that investors take profit from their BTC positions and invest part of these funds into altcoins [3].
Crypto Market Flow
Source: Rekt Capital
The 2025 altcoin season may start during the first quarter of 2025, based on fractal patterns shared by popular crypto trader Elja. On December 27, Elja wrote in an Xpost:
"A few more weeks before mega altseason…"
Total Crypto Market Cap Excluding BTC: 1-Month Chart
Source: Eljaboom
In crypto trading, technical traders use price fractal patterns to identify key support and resistance levels and potential trend reversals based on historical data.
Altcoin Rally to Benefit Ether Price
Ether (ETH) price could also benefit from the altcoin rally and recapture its previous all-time high. While some analysts foresee an ETH rally to $5,000 in the short term [4], others are predicting an ‘impulse breakout’ to $15,000 by the end of 2025.
Bitcoin Could Explode After $100K—Here’s Why
Source: YouTube
Conclusion
The decline of AI-based cryptos amidst a wider crypto market downtrend may be short-lived. With analysts expecting an incoming altcoin season in 2025, it is possible that Bitcoin profits will flow into smaller cryptocurrencies, including AI tokens.
References:
[1] CoinMarketCap
[2] Cointelegraph Markets Pro
[3] Rekt Capital
[4] Magazine: How Shibtoshi Gambled 37 ETH and Became a Shiba Inu Billionaire
