Bitcoin temporarily fell below $100,000 on Monday as President Trump kept cryptocurrency policy on the sidelines during his first day in office but recovered and stabilized at around $104,000 over the past 24 hours.
The overall cryptocurrency market capitalization was down -0.75% over the past 24 hours at $3.76 trillion, but was quickly moving towards this week’s high of over $3.8 trillion at the time of writing.
Risk sentiment has returned among traders, which is reflected in the fear and greed index for cryptocurrencies rising by 8 points to 84, indicating extreme greed in the market.
Why is Bitcoin rising?
Since Trump’s victory, the cryptocurrency sector has been anticipating favorable regulations in the US market.
Momentum received a major boost after acting SEC Chairman Mark O’Dea, who temporarily replaced Gary Gensler until he was appointed permanently, announced the creation of a dedicated cryptocurrency task force on January 21.
Led by pro-crypto Commissioner Hester Pearce, the initiative will work to collaborate with industry stakeholders and create a comprehensive framework for the digital assets market, moving away from the previous Commission’s regulation through enforcement approach.
This was a huge win for the industry, and the market reacted in kind, boosting Bitcoin’s position above the $103,000 support level that the major cryptocurrency has retested several times over the past few days.
Currently, analysts see gains expected to continue in the coming days as regulatory tensions ease. Some key indicators also support this theory.
First, whales played a major role in Bitcoin’s recent rebound.
Large investors continued to buy during the decline, which is a positive sign indicating their confidence that the price could rise further.
According to analyst Ali Martinez, whales have acquired more than 22,000 Bitcoin in the past 72 hours.
This accumulation can also lead to retail buying pressure, as small traders often follow in the footsteps of larger investors during uptrends.
Secondly, the total number of daily active addresses has increased over the past few days.
According to Martinez, this “indicates a positive outlook for a potential rise in prices,” as the rise in this metric is consistent with the continued accumulation of whales.
With the current momentum, if BTC can surpass $106,000, well-followed trader Rekt Capital expects a surge to a new all-time high in the coming days.
On the other hand, Daan Crypto Traders analyst says that Bitcoin needs a daily close above $108,00 to enter into price discovery.
However, when writing, the pseudonymous analyst Blackmore noted that a diamond top pattern has formed on Bitcoin’s 4-hour chart and could trigger a pullback if the price falls below the $103K-$104K support range.
In such a scenario, the analyst expects a decline towards the $94-96 thousand region.
However, fellow analyst Val Mei points out that the diamond pattern is not always a reversal pattern and could also mean a looming period of consolidation ahead.
At press time, Bitcoin was trading above $104,000, down 1.2% over the past 24 hours.
AI tokens post strong gains
A number of top altcoins posted double-digit digital gains in response to Bitcoin’s mid-week recovery.
Much of the momentum at the start of the week came after the official Trump family-backed meme coins Trump (TRUMP) and Meme Meme (MELANIA) debuted over the past weekend, reviving interest in the altcoin market.
The Altcoin Season Index rose 2 points in the past 24 hours to 45.
However, retail interest was mostly directed towards altcoins related to AI projects after President Trump announced the $500 billion Stargate AI infrastructure project on January 21.
The initiative, a collaboration between OpenAI, SoftBank and Oracle, aims to create large-scale AI data centers in the United States, starting with a $100 billion investment in Texas.
The announcement of Stargate has led to increased interest in AI-focused altcoins as investors anticipate significant growth in the AI sector.
All of today’s winners came from the Artificial Intelligence coins category. They are as follows:
ai16z
With a recorded gain of 25.8% compared to the previous day, ai16z (AI16Z) was the leading gainer among the top 100 cryptocurrencies by market cap.
The altcoin was able to rebound from the losses seen on January 20, rising to an intraday high of $1.25 while its market capitalization rose by more than $475 million.
source: CoinMarketCap
Investors have gained interest in the AI Agent Project’s native coin as it has been listed on cryptocurrency exchange Kraken Pro, which has added the altcoin to its perpetual futures market.
The project has also partnered with decentralized infrastructure provider Hyperbolic to leverage its computational resources in an effort to enhance the capabilities of AI agents running on the open source operating system, ElizaOS.
Virtualization protocol
Virtuals Protocol (VIRTUAL), another AI client builder, made this list as it saw a 22% rise over the past day.
With a market capitalization of over $3 billion, the altcoin is currently the second largest AI proxy coin in the cryptocurrency market.
source: CoinMarketCap
Today’s gains came after the announcement of a buy-and-burn event using tax revenues collected from various projects within the ecosystem.
Over the next 30 days, the project will buy back a total of $35 million in tokens from the projects in which they were minted and burned, reducing supply and increasing scarcity across the ecosystem.
The altcoin also rose alongside a market-wide rally among AI-focused projects following President Donald Trump’s announcement of “Stargate,” a new initiative committing $500 billion over the next four years to developing AI infrastructure in the United States. .
Worldcoin
Worlcoin (WLD) has surged in value by 20% in the past 24 hours as the biometric crypto project saw its market capitalization rise to over $2.12 billion.
The altcoin was trading at $2.27 per coin while its trading volume jumped more than 147%, hovering around $1 billion at writing,
source: CoinMarketCap
The project, which was co-founded by OpenAI’s Sam Altman in 2019, rose after news of the Stargate initiative emerged, which is said to be backed by OpenAI among other major players.
The venture capital-backed Proof of Humanity project has previously seen spikes due to OpenAI-related news.
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