AI Tokens Face Volatility Amid Geopolitical Tensions
Cryptocurrency markets experienced turbulence early Friday, with liquidations exceeding $1 billion amid escalating geopolitical tensions in the Middle East. Artificial Intelligence (AI) tokens, including Bittensor (TAO), Virtuals Protocol (VIRTUAL), and Kaito (KAITO), were not immune to the volatility, posting losses as the weekend approached.
The broader crypto market recovery remains subdued, with Bitcoin (BTC) hovering around $105,000 during the American session. Investors are likely digesting the potential impact of the conflict between Israel and Iran.
According to CoinGecko, the AI sector’s market capitalization has fallen to $26.5 billion. Leading altcoins like Bittensor, Internet Computer (ICP), and Near Protocol (NEAR) are all in the red, sustaining significant losses over the past 24 hours.
Bittensor Shows Signs of Potential Recovery
Bittensor, the open-source protocol leveraging blockchain technology to advance a decentralized network for machine learning AI models, is currently trading at $366.
The token is trading below its 50-period Exponential Moving Average (EMA) at $396, the 100-period EMA at $399, and the 200-period EMA at $401, indicating a bearish technical bias.
The Moving Average Convergence Divergence (MACD) indicator has maintained a sell signal on the 4-hour chart since Wednesday, when the blue MACD line crossed below the red signal line. A persistent sell signal could prompt traders to reduce their TAO exposure, potentially extending the decline below the short-term support at $350 towards $340.
However, the Relative Strength Index (RSI) is approaching oversold territory on the 4-hour timeframe, suggesting a possible rebound during the weekend session. Traders will be watching for a potential RSI reversal towards the 50 midline to confirm the likelihood of a recovery targeting $400.
Virtuals Protocol Mitigates Losses
Virtuals Protocol, the AI agent network, is showing resilience, trading around $1.85. With the RSI reversing above 40 and heading towards the 50 midline, the path of least resistance is slowly shifting upwards, increasing the chances of a significant recovery in the upcoming weekend session.
Traders will be monitoring price action for a break above the 200-period EMA resistance at $1.87, which could pave the way for gains beyond the confluence obstacle around $1.95. The 50-period EMA and 100-period EMA converge here, reinforcing the resistance.
Despite the potential recovery, market participants should temper bullish expectations, given the sell signal maintained by the MACD indicator since Thursday. Red histogram bars extending below the centerline (0.00) reinforce the bearish control over the AI token.
Kaito Bulls Defend Key Support
Kaito’s price is exhibiting subtle signs of recovery despite a 2% dip on the day and a 22% drop from its recent high of $1.81, reached on Wednesday. The token displays an oversold RSI, potentially influencing a short-term recovery as volatility in the broader crypto market cools.
The RSI is signaling a potential reversal towards neutrality and an extension of the recovery towards the 50 midline as the price rises above the $1.40 level. Several potential 4-hour closes above this key level would encourage traders to buy the dip, increasing the intensity of the tailwind and the likelihood of a sharp move towards the next key resistance at $1.60.
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