After bottoming out around $91,000, Bitcoin continued its recovery towards $100,000 over a week marked by intense volatility. The leading cryptocurrency was up 4% in the past week. The overall cryptocurrency market cap also made a comeback after dipping to monthly lows right before New Year’s Eve as liquidity dried up during the holiday lull. With traders returning to the market, the total crypto market cap has rebounded above $3.55 trillion. Nevertheless, momentum is yet to return to pre-Christmas levels, with the Crypto Fear and Greed Index currently hovering at neutral levels, reflecting a cautious sentiment among investors. Why did Bitcoin go down? The key reason behind Bitcoin’s past week’s volatility was profit-taking among long-term investors and increased selling pressure from Wall Street, with Bitcoin exchange-traded funds seeing outflows of over $660 million and $387.54 million the week before. Further, the Federal Reserve’s hawkish stance added to the downward pressure. Last month, the Fed’s 25 basis points rate cut was accompanied by hints at the possibility of fewer rate cuts in 2025 than what was previously anticipated. This is typically bad news for risk assets like Bitcoin as the Fed’s attempt to fight inflation fuels higher treasury yields. According to some experts, the lacklustre performance of the stock market has also contributed to Bitcoin’s recent struggles. Analysts at Bravo Research believe BTC could mirror the weakness currently seen in the stock market. In September 2024, stocks rallied while Bitcoin lagged behind, but the flagship crypto eventually caught up to equities’ strength. Now, Bravo warns that if stocks keep falling, a similar situation might play out, despite BTC currently being in a parabolic up trend. They expect a correction towards $80,000 before the rally finds strength to climb higher. Similar projections were made by crypto analyst Pizzino, who speculated that it’s unlikely that Bitcoin would be retesting its all-time high anytime soon. Rather, a break below the $91,750 support level would see the price moving towards the mid to low $80k range. However, like other traders and pundits, he stressed that corrections like this are a part of bull runs. Historically, Bitcoin has seen corrections of roughly 30% on average before continuing a bull market rally during past cycles. Bitcoin made a late-week recovery and was close to retesting the $98,000 resistance level late Friday, yet some experts advised caution. According to crypto analyst Ali, Bitcoin must hold steady above $97K to confirm bullish momentum and signal the end of the current correction. The cryptocurrency has struggled to maintain this level over the past few weeks. Others, however, expect Bitcoin to trade in a range in the coming weeks and expect a drop in its market dominance, which currently sits at over 55%. Several traders were of the opinion that if BTC dominance drops towards the low 50s, it would trigger the start of an alt season. The altcoin season index was at 50 as of January 3, indicating that the market had not yet shifted in favour of altcoins. Typically, the market is considered to be in an altseason when this metric climbs above 75. Meanwhile, the past week saw relatively subdued activity, with most altcoins showing limited momentum. However, meme coins and AI tokens stood out as the main gainers, managing to post notable gains despite the broader market’s sluggish performance. The leading performers were as follows: ai16z Ai16z (AI16Z) led the highest gains over the past week among the top 100 largest crypto assets by market cap. Source: CoinMarketCap The AI token’s price appreciated by 155% over the last 7 days, hitting an all-time high of $2.47 on January 2 before settling back at $2.17 at press time. Its market cap reached nearly $2.4 billion, making it the first AI token on Solana to surpass the $2 billion mark—more than double the $951 million observed at the beginning of the week. AI16Z rallied after the project announced plans to roll out an AI agent launchpad in Q1 2025 for deploying AI projects developed on the project’s AI operating system named Eliza. The plans include listing fees for new agents, staking mechanisms, and liquidity pools, all aimed at driving value to the AI16Z token, which will also serve as the primary currency on the new launchpad. Another catalyst fueling the surge is its futures listing on Binance following its listing on Binance Alpha, a pre-listing platform for early-stage projects. Further, whales have begun accumulating the altcoin, boosting confidence among retail traders to invest in the AI coin, thereby driving further gains. Fartcoin Over the past week, Fartcoin (FARTCOIN) rose 44.5%, hitting a new record of $1.52 at the time of writing. Its market cap had also crossed the $1.5 billion mark for the first time. Source: CoinMarketCap The recent surge in FARTCOIN’s value seems to be fueled by its exposure on CNBC, an international news outlet with a significant Instagram presence of over 2.7 million followers, which shared a post mentioning the meme coin on the social platform. Additionally, the meme coin’s price surge coincided with a 12.4% rise in the broader meme coin market over the past day, driven by anticipation of a more crypto-friendly approach under incoming US President Donald Trump. Ethena Ethena (ENA) was up 30% over the past week, which shot its price up to $1.2 at the time of publication while its market cap surpassed $3.6 billion. The altcoin benefitted from some late-week market activity, evident from its trading volume, which was up 46.8% when writing. Source: CoinMarketCap ENA rallied after Grayscale Research, the research arm of leading asset manager Grayscale, added ENA to its list of 20 assets that, in their view, have the potential for major gains in Q1 2025. However, the leading driver was the crypto exchange Bitget, which added USDe, Ethena Lab’s synthetic dollar-backed stablecoin, as collateral on the platform. The listing drove renewed momentum into the altcoin as the community viewed this as a noteworthy protocol-related development. The post Altcoin AI16Z soars 100% in weekly gains as Bitcoin rebounds appeared first on Invezz
