AI tokens daily losses surpass market’s average downturn after DOJ subpoenas Nvidia

Mila September 4, 2024

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Key Takeaways

AI tokens fell 7.1% on average, outpacing Bitcoin and Ethereum’s 4.3% and 4.4% declines.
Blockchain AI agents category experienced an 11.1% average intraday drop amid the market downturn.

Nvidia got subpoenaed by the US Department of Justice (DOJ) on Sept. 3 as the chipmaker is investigated over potential antitrust law violations. As a result, Nvidia shares are already down 8.3% on the week, and artificial intelligence (AI) tokens are tanking more than average.

While major crypto such as Bitcoin (BTC) and Ethereum (ETH) slumped 4.3% and 4.4% in the past 24 hours, respectively, AI-related tokens tanked 7.1% on average in the period. This is one of the worst daily performances by a crypto category, according to CoinGecko’s data. In the weekly timeframe, their average drawdown is 13.7%.

Bittensor (TAO) and Artificial Superintelligence Alliance (ASI) tokens had the worst daily performances among AI tokens with over $1 billion in market cap, falling by 7.8% each.

Meanwhile, Near Protocol (NEAR), Render (RENDER), and Internet Computer (ICP) followed the broad crypto market downturn by shedding 4.6%, 5.2%, and 3.7% over the past 24 hours, respectively.

Notably, the category of blockchain AI agents showed an even worse performance, dropping by 11.1% on average in the intraday period. AI agents, as the name suggests, are parts of blockchain infrastructures that are autonomous, and can act as traders, miners, validators, or arbitrageurs.

AI agents tokens such as Phala (PHA) and Oraichain (ORAI) are down by 4.7% and 5.3% in the past 24 hours.

Why is the market down?

Sapphire

The crypto market has been showing choppy sideways trading at least since March when Bitcoin reached its recent all-time high in the $73,700 price area. Thus, the recent downturn in prices is a movement that is to be expected.

As highlighted by the trader known as Rekt Capital, BTC is trading within a price channel on the weekly timeframe and could turn the $58,000 price level into resistance if it doesn’t close the week above $58,300.

Furthermore, more downside can be expected in September, as Crypto Briefing reported. Bitfinex analysts predict a possible retracement up to the $45,500 price level this month, following rate cuts by the Fed. However, this price target is based on evolving macroeconomic metrics, thus, not being an arbitrary number.