AI Stocks are in Bubble Territory— And it Might Hurt Your Favorite AI Coins
NAIROBI (CoinChapter.com) — AI stocks are in bubble territory, posing a potential risk to your favorite AI coins. Recent market shifts suggest that the technology sector, especially those heavily invested in artificial intelligence, may be facing an unsustainable valuation surge.
Investors are becoming increasingly wary of whether these investments will yield the anticipated returns, creating an uncertain future for related AI coins.
Skepticism Surrounds AI Stocks and AI Coins
Investor confidence in AI stocks has waned. Shares of major tech firms like Nvidia and Broadcom have dropped as concerns grow about whether their heavy investments in AI will yield returns soon.
James Ferguson, a founding partner of MacroStrategy Partnership, told Bloomberg’s “Merryn Talks Money” podcast that AI remains “unproven” and “effectively useless” outside narrow applications. He criticized popular AI models like ChatGPT for their unreliable results and high energy demands.
Ferguson noted a bubble in AI-related markets, especially microchip manufacturers, warning that high valuations compared to earnings often lead to poor outcomes. He likened the current situation to the dot-com bubble, where many invested despite knowing it might not last.
David E. Rovella of Bloomberg supported these views, noting that a reassessment of overvalued assets, including Nvidia stocks, reflects broader market skepticism. This cautious outlook is affecting both AI stocks and AI coins.
Will AI Coins Survive the Market Shakeup?
The fallout from an AI stock bubble could extend to AI coins. The AI crypto market cap stands at $28.3 billion, reflecting a 2.5% change in the last 24 hours. AI coins, often tied to the success of AI projects and companies, could see significant price volatility. As investor confidence in AI stocks wanes, the sentiment might spill over into the crypto market, causing sharp declines in AI-linked digital assets.
NEAR Protocol’s Resilience Amid Market Turmoil
NEAR Protocol (NEAR) trades at $5.63, up 3.80% in the last 24 hours. Its market cap is $6.22 billion, with a 24-hour trading volume of $250.91 million. NEAR has faced a steep correction since June. After peaking at $7.66, the price dropped to $4.40, a 42.56% decline.
NEAR trades at $5.63, above its 50-day and 200-day EMAs, indicating potential bullishness. The 50-day EMA at $5.73 serves as resistance.
The RSI is 49.96, nearly neutral but showing slight buying interest. Key support is at $5.37, with resistance at $5.73. A break above the 50-day EMA could attract buyers, while falling below the 200-day EMA may signal a bearish reversal.
FET’s Battle with Descending Resistance
Artificial Superintelligence Alliance (FET) trades at $1.26, up 3.63% in the past 24 hours. It has a market cap of $3.17 billion and a 24-hour trading volume of $105.01 million.
Fetch.ai’s price follows a descending resistance line from February to July, indicating persistent selling pressure. Despite occasional breakouts, the price consistently falls back, showing weak bullish momentum. The Bollinger Bands indicate high volatility, with the price oscillating between $1.04 and $1.54.
Render Token’s Struggle Against Bearish Trends
Render (RENDER) is priced at $6.78, up 3.19% in the last 24 hours. It has a market cap of $2.66 billion and a 24-hour trading volume of $53.94 million, up 367.87%. Following a token swap and rebranding, Binance added new trading services for Render, sparking a 4% price jump.
Render’s price chart shows a bearish pattern, trading below a descending resistance line since April. The current price is $6.78, below significant resistance at $8.00. The MACD is negative at -0.2074, indicating bearish momentum. The RSI is neutral at 49.94, showing indecisiveness.
Key support for the AIK crypto token lies at $5.00, with a break below likely leading to further declines. Conversely, breaking above $8.00 could signal a bullish phase.
The recent shifts in investor sentiment towards AI stocks and their perceived overvaluation signal potential trouble for AI coins. With significant declines in major AI stocks like Nvidia and Broadcom, the ripple effects are beginning to impact AI coins, heightening their price volatility.
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