Is this a rebound signal for 'AI coins'?…"Funds are flowing into strong altcoin names" [Kang Min-seung’s Altcoin Now]

The altcoin market continues to face broad selling pressure amid geopolitical tensions in the Middle East and a delay in expectations for US rate cuts. Still, artificial intelligence (AI)-related coins and a handful of tokens are showing a short-term rebound, drawing attention.

'AI coins' rebound…Altcoin market shows clear divergence by token

In the altcoin market, weekly volatility has increased, while a rising trend has emerged centered on the AI segment and some small- and mid-cap names.

According to on-chain data platform SoSoValue on the 21st, AI-related coins have maintained relatively resilient momentum despite the broader market correction. Bittensor (TAO) rose about 29.2% on the week to stay strong, and Fetch.ai (FET) also climbed 25.1%, moving higher in tandem.

In particular, Unifi AI (UAI) surged 71.6% and Siren (SIREN) gained 60.2%, posting standout advances. Render (RENDER) rose 5.7% and Virtual (VIRTUAL) 1.6%, extending gains across mid- to large-cap names as well. Among small- and mid-caps, some tokens saw sharp short-term moves, including Kite (KITE) up 16.4% and Fartcoin (FARTCOIN) up 25%.

This trend is seen as aligning with expectations for rising on-chain demand driven by the expansion of AI infrastructure. On the 17th, Nvidia CEO Jensen Huang said at the GTC conference that demand for AI infrastructure could expand to about $1 trillion through next year.

As AI-agent environments proliferate, the potential use of blockchain infrastructure is coming into focus, lifting interest in related projects. CoinDesk, a crypto-focused media outlet, said, "With the expansion of AI infrastructure, capital inflows are being seen into related crypto assets."

Elsewhere, gains widened sharply in some smaller coins. Notable increases were observed in several names, including Zano (ZANO) up 55.2%, Dexxe (DEXXE) up 40.7%, B (B) up 38.7%, and Tag (TAG) up 37.9%.

Some interpret this as a shift in market structure. Andrei Grachev, co-founder of DWF Labs, said, "As institutional money concentrates in large assets such as Bitcoin and Ethereum, the broad, across-the-board altcoin rallies seen in the past are gradually weakening," adding, "Recently, funds have tended to move selectively around specific narratives and sectors."

Crypto analytics platform 10x Research also noted that "even within altcoins, funds are concentrating in a handful of names, widening performance gaps across tokens."

'A gradual rebound'…Altcoin market: rebound or consolidation?

The altcoin market has continued a short-term rebound after a recent decline, but the upside momentum still does not appear clearly defined. Opinions in the market are split over whether this can be assessed as a trend reversal.

Alex Kuptsikevich, senior analyst at FxPro, said, "As total crypto market capitalization has fallen to about $2.42 trillion, the market is broadly under selling pressure." He added, "Bitcoin is testing a medium-term support line, and the recent rebound may be an extension of a consolidation phase that followed the decline," and "Given the macro environment, upside drivers are likely to remain limited."

With Middle East-driven geopolitical risks stoking volatility in energy prices, hawkish (tightening-leaning) remarks by Federal Reserve Chair Jerome Powell have weakened rate-cut expectations, weighing on altcoins overall. The market is watching Powell’s speech on the 21st (23:30 Korea time). In particular, there are also concerns that volatility could increase around the 20th (21st Korea time), which coincides with the 'quadruple witching' expiration of futures and options.

Crypto analyst Benjamin Cowen explained, "Rising oil prices can limit room for rate cuts, and if energy costs rise, consumers’ spending capacity in the real economy could shrink, dampening risk appetite." On the current rebound, he said, "It could be a temporary bounce within a downtrend," adding, "If Bitcoin falls below $60,000, downside pressure across the market could intensify and altcoin volatility could rise." He continued, "In this environment, it is preferable to focus on risk management rather than aggressive altcoin buying."

On the other hand, some view the current level as an opportunity. Crypto strategist Michaël van de Poppe said, "Within the Ethereum ecosystem, stablecoin supply is about 3x versus 2022 and daily transactions are up more than 2x—network metrics are steadily expanding, but prices have remained relatively stagnant," adding, "In particular, the Ethereum/gold metric being at a low level could indicate a zone of relative undervaluation."

The strategist added, "A phase of weakened risk sentiment like the current one can be interpreted as an opportunity over the medium to long term, and depending on changes in the market environment, it is worth watching the potential for a rebound in major altcoins centered on Ethereum."

Reporter Kang Min-seung, BloomingBit minriver@bloomingbit.io