- Exploring the rise of AI coins as FET and TAO lead charge.
- The price action of Fetch.AI and BitTensor looking good.
The crypto market sector analysis reveals that the AI, DeFi, and memecoin sectors have outperformed Layer 1 and Layer 2 solutions over the last month.
Leading this charge are Fetch.AI [FET] and BitTensor [TAO], which have shown significant gains since August. As the overall market sentiment remains uncertain, traders are looking for previous narratives to gain traction.
Source: X
While a new narrative may emerge later, AI and memecoins are the most straightforward investments if the market strengthens.
Price action analysis of FET & TAO
Given that AI coins are performing well, let’s examine the price action of FET and TAO pairs.
Nvidia’s impressive quarterly earnings in August have bolstered confidence in AI coins, signaling a positive outlook for these assets.
For Fetch.AI, the price action of the FET/USDT pair indicates a potential surge. It has recently broken out of an inverted head and shoulders pattern, which typically signals a bullish reversal.
Additionally, the Chaikin Money Flow (CMF) is trending upwards, suggesting increased buying activity in the market. If this trend continues, it might reach $2.21 by year-end or early next year.
Source: TradingView
Similarly, BitTensor presents a bullish outlook. Recently, TAO faced rejection at the $440 price level after sweeping liquidity above two equal highs.
However, TAO/USDT remains bullish, as prices are moving toward filling the gap created by a significant wick.
The CMF for TAO is on the verge of turning positive, indicating that money is flowing into this AI asset. Furthermore, the relative strength index (RSI) is currently in overbought territory.
While an overbought RSI can indicate a market correction, it often suggests strong bullish momentum, especially in the case of TAO.
Source: TradingView
The Futures Funding Rates
Another positive indicator is the recent shift in futures Funding Rates for Fetch.AI, which turned green after being negative.
This change indicates that more traders are taking long positions, which typically leads to higher prices for FET and other AI coins.
Rising Funding Rates mean long traders are compensating short traders to maintain their positions, reflecting increased demand for FET and its peers.
Source: Coinglass
However, this situation can raise liquidation risks for long positions if the market takes a downturn.
Coin comparison
FET appears to be the more favorable choice when considering investment options between the two. Over the past month, FET has gained 71%, outperforming TAO’s 28%.
Additionally, FET boasts a higher market cap of $3.79 billion, compared to TAO’s $2.46 billion. This results in a volume-to-market cap ratio of 11.65% for FET and 6.54% for TAO.
The higher volume-to-market cap ratio for FET suggests it may be a safer investment, particularly regarding price volatility.
Source: Coinpare
The AI sector, led by FET and TAO, shows promising potential for higher prices.
Read Artificial Superintelligence Alliance’s [FET] Price Prediction 2024–2025
With favorable market conditions and positive price action, traders and investors alike should keep an eye on these coins as they navigate the evolving crypto landscape.
As AI coins continue to gain traction, both FET and TAO could present worthwhile opportunities for those looking to invest in this dynamic market.
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