Key Considerations as AI Token Prices Skyrocket

The artificial intelligence (AI) token market has seen a boost following Bitcoin’s recent surge above $71,000. Over the past 24 hours, the AI token market capitalization has increased by 5%, while trading volume has risen by 20%, according to CoinMarketCap.

Leading AI-based cryptocurrency assets, such as NEAR, RNDR, and TAO, have experienced gains of 8%, 5%, and 7% respectively in the past 24 hours.

However, there are no clear signs of a sustained recovery. Assessing key momentum indicators tracking buying and selling activity suggests that the price increases are not supported by any substantial market demand.

This merely reflects the overall growth of the cryptocurrency market in the past 24 hours. For example, NEAR’s Relative Strength Index (RSI) stands at 52.29, while its Money Flow Index (MFI) is at 26.96.

The combined results of these two momentum indicators indicate that although market sentiment remains predominantly neutral, there has been a significant outflow of funds from the NEAR market.

This suggests that this altcoin may lose its recent gains as selling pressure increases.

Regarding RNDR, its Chaikin Money Flow (CMF) was detected below the 0 line at the time of writing. This indicator measures the flow of money into and out of an asset market.

When it returns a value below 0, it signals market weakness. It indicates a surge in selling pressure, marked by capital flight, and suggests that prices may decline. At the time of writing, RNDR’s CMF is -0.05.

RNDR’s Aroon Up line (orange) is at 0%, confirming the weakness of the current uptrend. The Aroon indicator for an asset measures the strength of trends and potential price reversals.

When the Aroon Up line is close to 0, any market uptrend is considered weak, and the recent highs are seen as having been reached for a long time. TAO’s performance is no different, as its price is currently trading close to the 20-day Exponential Moving Average (EMA).

When an asset’s price trades close to this important moving average line, the market will consolidate as prices remain within a range.

This is confirmed by TAO’s decreasing Average True Range (ATR). This indicator measures market volatility. When it decreases in this way, it indicates a period of indecision or consolidation in the market.