Though the cryptocurrency market has been hit by extreme bearish forces at the moment, this has been painfully apparent from the increasing short interest on Bitfinex, the plummeting price of ETH and the collapse of bitcoin’s number of active addresses. All these indicators are a sign of very cautious investor sentiment. Over the last month, trading volume for AI-related tokens has skyrocketed. This spike is a clear signal that there is an increasing appetite to understand how artificial intelligence and blockchain technology can work together.

Short interest on Bitfinex has just hit 25% of total open interest – up from 18% the day before. This sudden uptick is a clear sign of traders expecting price action to move downward even more. Ethereum wasn’t spared either — down 4.2% to $1,567, Ethereum’s price action added to the woeful market vibes.

Further the amount of active Bitcoin addresses have recently dropped by 10%, down to just 850k addresses. This decline suggests reduced network activity. The well-known Fear and Greed Index, calculated by Alternative.me, recently fell to 32, indicating that investors are in extreme fear mode. The Relative Strength Index (RSI) for Bitcoin recently fell to 35, as per TradingView. This is a clear indicator that Bitcoin is in an oversold condition at this moment.

Amidst even the most bearish of signals, trading going in and out of every asset class is booming, with volume hitting $34.5 billion. Bitcoin’s 24 hour trading volume increased by 12% in the past day. This increase is a sign that investors/swing traders are still active with the top dog, but deadly careful.

At the same time, one area of the crypto markets is booming with trading activity. Tokens related to AI. Even compared to yesterday, the daily trading volume for AI tokens has grown over 15%. AGIX, in particular, has had trading volume swell to $50 million from $43.5 million yesterday. This increase is representative of an even wider crypto AI trend.

The potential connection between AI advancements and crypto assets has become clearer of late. Of course, NVIDIA is the one to beat — especially after announcing its new AI platform just yesterday. As expected, the value of the top ten cryptos jumped by over 2%. Positive developments in the AI sector can drive the crypto market. It is particularly so in the near term.