Two AI tokens to watch after Nvidia earnings, Friday crypto sell-off
- Nvidia reported better-than-expected earnings and revenue this week amid steady demand for AI infrastructure.
- Bittensor holds support at $315, down 31% from its July peak as risk-off sentiment spreads in the broader crypto market.
- Near Protocol displays subtle recovery signals as bulls push to erase intraday losses.
The cryptocurrency market is experiencing a sudden surge in selling pressure on Friday, with Bitcoin (BTC) falling below $110,000 before making a minor recovery. Interest in crypto assets has remained shaky over the past few weeks, as investors focus on the likelihood of Federal Reserve (Fed) interest rate cuts in September.
Tokens at the intersection of the blockchain technology and Artificial Intelligence (AI) sectors have not been spared the turmoil, as evidenced by a collective 1.8% drop in the market capitalization to $28.5 billion over the past 24 hours.
The release of Nvidia's earnings this week, the most valuable company, provided investors with insights into the state of the AI industry. While the reported earnings and revenue came in better than expected, the broader market appeared to be bothered by key elements, such as Nvidia's Data Center revenue rising just 5% quarterly and the Data Center segment revenue coming in at $41.1 billion, rather than the $41.3 billion consensus.
Nvidia earnings, revenue anchor AI demand
Nvidia reported its earnings on Wednesday, with revenue for the second quarter totaling $46.7 billion, a 6% increase from the previous quarter. The revenue surpassed the estimated $46.06 billion.
Despite Nvidia not reporting the sale of the highly sought-after H20 chips to China-based customers, overall sales growth remained above 50%, signalling steady demand for AI infrastructure.
Nvidia is projecting $54 billion in sales in the third quarter, with a margin of plus or minus 2%. The projection does not assume shipments of the H20 chips to China. Analysts estimate Nvidia to report revenue of $53.1 billion, according to CNBC.
The majority of Wall Street analysts believe that AI demand remains strong, backed by steady Nvidia sales. Still, the rally could be slowing down. Marvell stock fell 13% on Friday morning, also due to sentiment that the AI rally is slowing. Investors will closely watch Nvidia's performance this quarter to gauge market sentiment and demand for AI infrastructure.
Meanwhile, interest in AI tokens remains suppressed, with the largest coins, Bittensor (TAO) and Near Protocol (NEAR), approximately 58% and 88% down, respectively, from their record highs.
AI tokens update: Bittensor, Near Protocol hold above key support levels
Bittensor price remains above its support at $315, down over 5% to exchange hands at around $318. The token's technical structure leans bearishly as traders actively manage risk to protect their capital.
The Moving Average Convergence Divergence (MACD) indicator on the 4-hour chart shows a sell signal, backing a risk-averse sentiment. If the MACD line in blue remains below the red signal line, the TAO price could extend the drawdown toward the $300 round-number support.
As the Relative Strength Index (RSI) at 36 nears oversold territory, a trend reversal could occur. The next few days could offer insights into the technical picture and the possibility of a recovery.
TAO/USDT 4-hour chart
As for Near Protocol, a recovery is underway following an extended correction, which tested support at $2.39 earlier in the day. Although the MACD indicator encourages traders to de-risk, displaying a sell signal, the RSI has stabilized above 40, signaling a gradual return of buying pressure.
NEAR/USDT 4-hour chart
Traders will look for a rebound above key moving averages, such as the 50-period Exponential Moving Average (EMA) at $2.43, the 100-period EMA at $2.57, and the 200-period EMA at $2.59, to gauge bullish sentiment and NEAR's recovery capability.
Cryptocurrency prices FAQs
Token launches influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence crypto assets mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs.
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