The value of Artificial Intelligence (AI) crypto tokens has been on a rollercoaster ride, largely influenced by external factors, with the recent dip tied closely to Nvidia Corp.
Over the past eight months, AI tokens have surged, fueled by Nvidia’s meteoric rise as the company led advancements in artificial intelligence technology. However, Tuesday’s developments have overshadowed the AI token market, leading to significant price declines.
AI Tokens Take a Hit as NVIDIA Faces US DOJ
On Tuesday, the US Department of Justice (DOJ) issued subpoenas to Nvidia and other tech companies as part of an investigation into potential antitrust violations. DOJ is scrutinizing whether Nvidia unfairly restricts competition by making it difficult for buyers to switch to other suppliers. There are also concerns that Nvidia may be penalizing companies that do not exclusively use its AI chips.
This investigation has sent shockwaves through the market. Nvidia’s shares, already reeling from a historic $279 billion loss earlier in the week, took another hit following the news of the subpoenas.
As one of the most influential players in the AI industry, Nvidia’s challenges have had a ripple effect on related assets, particularly AI tokens. Over the past 24 hours, the market capitalization of AI tokens has dropped by 7.6%, shrinking to $20.6 billion. This decline reflects broader concerns about the future stability of AI investments amid ongoing legal scrutiny.
Read more: 9 Best Artificial Intelligence Stocks To Buy in 2024
Top AI cryptocurrencies such as NEAR Protocol (NEAR), Internet Computer (ICP), and Injective (INJ), among others, have seen notable declines. However, leading the drawdown is Bittensor (TAO), which registered an 11% decline on Tuesday following NVIDIA’s news.
TAO Price Prediction: There Is Hope
TAO price fell by 11% on Tuesday but recovered 2.3% today, bringing the overall drop in the last 24 hours to 9.6%. Currently trading at $251, TAO has experienced a significant pullback.
Despite this decline, there is a silver lining for TAO holders – the token remains within an ascending triangle pattern. This technical formation suggests that, despite recent losses, TAO could be poised for a potential breakout.
Should TAO break out above the $357 level, the token could see a 43% increase, targeting a price of $513. This scenario would mark a strong recovery and could reignite investor interest in the AI crypto space. However, this bullish outcome hinges on TAO’s ability to flip the $304 resistance level into support first.
Read more: Top 9 Artificial Intelligence (AI) Cryptocurrencies in 2024
If TAO fails to breach $304, it could face a drawdown to $263, which coincides with the pattern’s lower trend line. This would invalidate the bullish outlook and signal continued volatility for the altcoin.
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