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Artificial Intelligence (AI) tokens like Bittensor (TAO), Akash Network (AKT), and AIOZ Network prices were among the best performers on Tuesday. Bittensor soared to $255, its highest swing since August 3rd and 56% above its lowest point this month.
Akash Network’s token rose to $2.80, its highest point on August 2nd and 76% above its lowest swing in August. AIOZ token jumped to $0.4975, its highest level since August 3rd and 52% above this month’s low. Some of the other top-performing tokens were Stellar, AAVE, and Ripple.
Bittensor, Akash Network, and AIOZ are soaring
One of the main reasons why these AI tokens rose is that Nvidia shares bounced back after plunging to $90.8 on Monday. It rose by 11% and ended the day at $100 and then rose by over 3% in the after-market session.
Still, Nvidia has been one of the worst-performing companies in Wall Street as its market cap dropped from over $3 trillion to $2.3 trillion. It is still down by over 28% from its highest point this year.
Nvidia’s sell-off coincided with the recent Intel stock crash. Intel, a company that once dominated the semiconductor company has become a shell of its former self, with its stock falling by over 60% from its highest level in 2023. In most cases, AI tokens like TAO and AKT do well when Nvidia is rising.
For starters, Akash Network is a blockchain company that offers a decentralized compute platform. In its platform, users can share their free GPUs and earn money when people rent them out.
This is an important service because some of the top Nvidia’s products are now in short supply as the company fulfils orders from large companies like Microsoft, Google, and IBM.
Its GPUs are also highly expensive, with the H100 80GB version going for between $30,000 and $40,000. In Akash, you can rent the same product for as low as $0.79 per hour, making it highly affordable.
The most recent data shows that the network had 730 active leases and 67 active provers. Users spent over $3,000 in the last 24 hours.
AIOZ Network is another AI platform that offers a collaborative and decentralized AI computation network. Its platform enables users to access storage solutions. Similarly, Bittensor provides decentralized AI solutions.
A sense of calm returns
The other reason why the AKT, TAO, and AIOZ tokens are rising is that a sense of calm has returned to the market. Bitcoin has soared to over $56,000 while the total market cap of all coins has risen by over 5% in the last 24 hours.
The same trend is happening in other assets. In the stock market, the Nikkei 225 index jumped by over 8% on Tuesday after falling by almost 15% on Monday. In the US, the Nasdaq 100, S&P 500, and Dow Jones rose by over 0.50% in the futures market.
Therefore, this rebound is happening as investors buy the dip. As I warned earlier today, this rally could be a dead cat bounce, a situation where assets rebound and then resume the downward trend.
Crypto investors believe that this rebound has ‘legs’ since Bitcoin has formed two important chart patterns as shown below. Bitcoin formed a hammer chart pattern whose lower side was at around $49,000. A hammer pattern leads to more upside in the long term.
For example, the last time that Bitcoin formed a hammer was on July 5th and the coin rose by over 22% since then. Bitcoin also formed a hammer pattern on May 1st and then coin rebounded by over 20%.
Additionally, Bitcoin has formed a broadening wedge chart pattern, which is characterised by a series of lower lows and lower highs. In most cases, this pattern leads to a broad rebound.
Federal Reserve rate cuts
Fundamentally, there are rising chances that the US will go through a recession this year now that the labor market is imploding. A recession or a hard landing is generally a difficult time for the economy.
However, historically, it is usually a good thing for cryptocurrencies and other risky assets like stocks. This happens because a recession is normally accompanied by interventions by the Federal Reserve. In most cases, the Fed usually intervenes by cutting interest rates and implementing quantitative easing policies.In a statement, ING analysts said:
“At the moment we are leaning in the direction of a 50bp in September followed by a series of 25bp moves that would get us back to a Fed funds rate of around 3% by next summer – broadly in line with the Fed’s “neutral” viewpoint.”
Rate cuts make risky assets more attractive. In this case, sustained rate cuts will make money market funds less attractive since yields will move from over 5% to below 3%. These funds, which are amounting to over $6 trillion will go to assets like stocks and cryptocurrencies like Bitcoin and Ethereum.
Therefore, while the Akash Network, Bittensor, and AIOZ may have some more upside, traders should be worried about a dead cat bounce.
Watch here: https://www.youtube.com/embed/YWL-tkXWGuY?feature=oembed
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