Unpacking the AI Crypto Coins Crash: What’s Driving TAO, ICP, and NEAR Down?

Introduction to the

The crypto market is facing tough times, and AI crypto coins are hit hard. Coins like Bittensor (TAO), Internet Computer (ICP), and Near Protocol (NEAR) have seen big drops. The total market cap for AI tokens fell 3.4% in the last 24 hours to $12.5 billion. This drop kills chances for quick buy-the-dip trades.

Why is this happening? Risk-off mood is spreading. Investors are pulling back from high-risk assets. Let’s break it down step by step, looking at prices, market signals, and technical charts.

Current Price Action: How Bad Is It?

Bittensor (TAO), the top AI token, dropped nearly 3% today. It trades at around $158. Internet Computer (ICP) lost almost 7% in 24 hours and 20% over the week. Near Protocol (NEAR) is at $1.01, down 6% today and 17% in seven days.

• TAO: $158 (-3% intraday)
• ICP: Down 7% (24h), 20% (7d)
• NEAR: $1.01 (-6% intraday, -17% weekly)

This isn’t just a small dip. It’s part of a bigger tied to the whole market.

Bittensor (TAO): The Leader Under Pressure

TAO shows the most worry in its futures market. Open Interest (OI) dropped to $106 million on Monday. That’s the lowest since September 2024, down from $111 million on Sunday.

What is OI? It measures the total value of open futures contracts. Falling OI means traders are closing positions, not opening new ones. They lack faith in an uptrend. OI peaked at $418 million in early November when TAO was at $539.

Lower OI signals less liquidity and capital leaving. It fuels bearish views, like more liquidations and weak demand.

Technical Analysis for TAO

TAO sits way below key moving averages:

• 50-day EMA: $232
• 100-day EMA: $264
• 200-day EMA: $299

All EMAs slope down, confirming a bearish trend. MACD is below its signal line, but red bars are shrinking. This hints bearish force might ease slowly.

A close above 50-day EMA could target 100-day EMA. But a descending trendline from $539 caps gains at $218. RSI at 28 is oversold, so a bounce is possible. If it breaks higher, RSI needs to top 50 for a real uptrend.

Fail here? Expect an 11% drop to $142, a recent low.

Broader Market Sentiment: Funding Rates and Risk-Off

Funding rates show trader bets. Positive rates mean bulls pay bears, expecting price rises. Negative rates? Bears win, prices likely fall more.

In AI coins, weak funding and OI point to bearish bets. The whole crypto space feels it. Bitcoin hovers near $70,000 after a 15% rebound from $60,000 lows, but retail demand is low. Ethereum holds $2,000, but futures OI falls.

Spot Bitcoin ETFs saw $318 million outflows last week – third week in a row. This risk-off hits AI coins hardest, as they’re speculative.

Why AI Crypto Coins Were Hot – And Now Crashing

AI cryptos boomed on hype. Bittensor builds decentralized AI networks. ICP aims for web-speed smart contracts with AI. NEAR focuses on scalable AI apps.

They surged in late 2024 on AI buzz from ChatGPT and others. But now:

1. Market Correction: Bitcoin’s 9% weekly drop pulls everything down.
2. Profit Taking: After huge gains, sellers cash out.
3. Low Confidence: Falling OI shows no new buyers.
4. Macro Pressures: High interest rates and stock market wobbles scare risk assets.

Other coins like PI Network drop 3% on mainnet migration selling. Ripple (XRP) at $1.40 amid retail pressure.

Can AI Coins Bounce Back?

Short-term, oversold RSI offers hope for TAO. A break above $218 trendline could spark recovery. But bearish EMAs must flip.

Longer-term, AI tech is strong. Bittensor’s subnet model grows. ICP and NEAR have real use cases. Watch Bitcoin – if it holds $70k, alts might follow.

Key levels to watch:

What Should Investors Do?

Don’t panic sell oversold assets. But avoid FOMO buys in downtrends. Use stop-losses. Dollar-cost average if you believe in AI long-term.

Track OI, funding rates, and EMAs daily. Broader market like BTC/ETH sets the tone.

Conclusion: Navigating the

The comes from weak sentiment, bearish techs, and market pullback. TAO, ICP, NEAR face tests, but oversold signals hint at relief. Stay informed – crypto turns fast.

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