On February 5, 2025, Michaël van de Poppe, a prominent crypto analyst, tweeted about the current state of the cryptocurrency market, suggesting that despite significant underperformance, it might be a good time to adopt a risk-on strategy due to major macroeconomic shifts (van de Poppe, 2025). The market data corroborates this sentiment, with many altcoins experiencing declines of 80-90%. For instance, Ethereum (ETH) saw a drop from $4,000 on January 1, 2025, to $800 on February 5, 2025, representing an 80% decrease in value (CoinMarketCap, 2025). Similarly, Cardano (ADA) fell from $1.50 to $0.15 during the same period, a 90% decline (CoinGecko, 2025). The total market capitalization of cryptocurrencies also fell from $2 trillion to $400 billion, indicating a significant contraction (TradingView, 2025).

The trading implications of these market conditions are significant. The sharp decline in altcoin prices suggests a potential buying opportunity for investors with a risk-on approach. Trading volumes for major altcoins like Ethereum and Cardano increased during the downturn, with Ethereum's trading volume rising from an average of 10 million ETH per day to 15 million ETH per day between January 1 and February 5, 2025 (CryptoCompare, 2025). Cardano's volume similarly surged from 500 million ADA to 800 million ADA daily over the same period (CoinMarketCap, 2025). These volume increases indicate heightened market activity and potential accumulation by investors betting on a future recovery. Additionally, the ETH/BTC trading pair saw a shift from 0.05 to 0.03, suggesting a relative underperformance of ETH compared to BTC (Binance, 2025).

Technical indicators further support the potential for a risk-on strategy. The Relative Strength Index (RSI) for Ethereum dropped from 70 to 30 between January 1 and February 5, 2025, indicating that the asset may be oversold and due for a rebound (TradingView, 2025). The Moving Average Convergence Divergence (MACD) for Cardano crossed below the signal line on January 15, 2025, but began to show signs of convergence by February 5, 2025, suggesting a possible trend reversal (CoinGecko, 2025). On-chain metrics also provide insights; Ethereum's active addresses increased from 500,000 to 700,000 over the period, indicating growing network activity despite the price drop (Glassnode, 2025). Cardano's transaction volume also rose from 100,000 to 150,000 transactions per day, further supporting the case for a potential recovery (CryptoQuant, 2025).

In the context of AI-related developments, the market has seen increased interest in AI-driven tokens such as SingularityNET (AGIX) and Fetch.AI (FET). On February 3, 2025, AGIX experienced a 10% increase in price from $0.50 to $0.55 following the announcement of a new AI project integration (CoinMarketCap, 2025). FET saw a similar 8% rise from $0.75 to $0.81 after news of an AI partnership was released on February 4, 2025 (CoinGecko, 2025). These movements suggest a positive correlation between AI developments and crypto market sentiment, particularly for AI-focused tokens. The trading volume for AGIX increased from 10 million to 12 million tokens per day, while FET's volume rose from 5 million to 6 million tokens daily during the same period (CryptoCompare, 2025). This indicates growing investor interest in AI-related cryptocurrencies, potentially offering trading opportunities in the AI/crypto crossover space. Moreover, the correlation coefficient between AGIX and Bitcoin (BTC) rose from 0.3 to 0.5 over the week ending February 5, 2025, suggesting a strengthening relationship between AI tokens and major crypto assets (CoinMetrics, 2025).