The cryptocurrency market is poised to continue its structural sideways movement, with trading activity increasingly concentrated in altcoins tied to high-growth sectors such as artificial intelligence and perpetual decentralized exchanges (DEXs), according to a new analysis from HTX Research. This comes as institutional investors increasingly favor the booming artificial intelligence sector over digital assets, a trend underscored by fresh data and market behavior.
Macro Backdrop: Inflation Eases, but Geopolitics Weighs
HTX Research noted that the core Consumer Price Index (CPI), excluding energy costs, rose just 0.2% month-over-month — slightly below market expectations. This data point has tempered fears of further monetary tightening, helping Bitcoin and Ethereum hold their key support levels without significant sell-offs. However, the firm cautioned that ongoing volatility in global oil prices, driven by geopolitical conflicts, is suppressing broader risk appetite. This external pressure prevents a broad-based rally and instead fosters a market of stark sector differentiation, where capital flows are limited and selective.
Institutional Capital Shifts Toward AI
A separate analysis from Cointelegraph Market Research detailed four reasons crypto is losing ground to the AI boom. First, a stark performance gap: the S&P 500, when stripped of its AI-heavy components, has risen only 3.5% this year, while a dedicated AI-focused index surged nearly 50%. Second, the sheer scale of AI investment — U.S. Big Tech firms are projected to spend $725 billion on AI infrastructure this year, with Nvidia posting an $81.6 billion single-quarter revenue and SK Hynix reporting a 72% profit margin. Third, valuation challenges in crypto make it difficult for traditional institutions to assess objectively, while stablecoin supply at all-time highs remains parked in tokenized U.S. Treasurys rather than flowing into volatile assets. Fourth, U.S. spot Bitcoin ETFs recorded $2.3 billion in net outflows last month, including a 10-day streak that coincided with the AI stock rally. Notably, selling pressure was concentrated among large institutional funds, though long-term holders and market maker Wintermute have been accumulating BTC over-the-counter around the $72,000 level.
Where Crypto Capital Is Moving
Within this constrained environment, HTX Research identifies two areas attracting limited but focused capital: altcoins with tangible revenue or real utility, and tokens specifically tied to artificial intelligence and perpetual DEX platforms. Bitcoin is expected to show relative downside rigidity, but the real movement is anticipated in these niche altcoin sectors. The analysis suggests a rotation away from speculative tokens toward those with clearer fundamentals or strong technological narratives.
For traders, this outlook calls for selective positioning. Broad market gains are unlikely; instead, range-bound trading and sector-specific plays in AI and perpetual DEX altcoins may offer the best opportunities. While the crypto market is not in freefall, it faces fierce competition from AI for institutional dollars, and a catalyst — whether regulatory clarity or a macroeconomic shift — is needed to reverse the trend.
