Crypto AI tokens down despite Nvidia positive earnings report

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As a researcher with a background in both technology and finance, I’ve witnessed firsthand how interconnected these markets can be. The recent Nvidia earnings report, which surpassed expectations once again, was a significant event for tech investors. However, the impact on crypto AI tokens came as a surprise.

It’s common for Nvidia’s earnings reports to exceed expectations, but surprisingly, crypto AI tokens didn’t follow suit with a price surge this time. Instead, there was a decline in their prices despite some initial positive price movements before the announcement.

Nvidia earnings surpass expectations

As a researcher, I’d put it this way: Nvidia has been a standout performer among US stocks, contributing approximately 11% to the total growth of the S&P 500 over the past year. The anticipation surrounding its first-quarter earnings report was palpable, and once again, Nvidia delivered results that surpassed Wall Street’s expectations.

As an analyst, I would rephrase it this way: The reported adjusted earnings came in at $6.12 per share, surpassing the anticipated analyst consensus of $5.65. Additionally, revenues reached an impressive $26 billion, exceeding the forecasted figure of $24.69 billion.

While NVDA saw only minor decreases in value that day, the price of cryptocurrencies focused on artificial intelligence experienced more significant drops.

Previously, when there was good news about $NVDA’s earnings, cryptocurrencies focused on AI experienced significant price increases. In anticipation of this latest earnings report, several AI-centric crypto projects had seen growth prior. Yet, post the report release, all these projects plummeted below their initial prices for the day.

Why did crypto AI tokens take a hit?

As an analyst, I’ve observed that the price dip in the crypto AI sector wasn’t an isolated incident. It spread to other crypto markets and even impacted the stock market. The cause of this market volatility was the Federal Open Market Committee (FOMC) minutes release right before Nvidia’s earnings report. These minutes, revealing the committee’s monetary policy decisions, created uncertainty in the market, overshadowing the positive news from Nvidia.

The minutes revealed the Federal Reserve’s concern over inflation and indicated that certain members were prepared to raise interest rates rather than lowering them.

The market took a chilling hit, causing all significant US stock index prices to decrease.

In the cryptocurrency market, AI stocks like RNDr and FET experienced a price drop following their initial gains prior to their earnings reports. Specifically, RNDr declined by almost 5% at the end of the day and an additional 3% the next day. On the other hand, FET ended its trading session with a price similar to its opening value after climbing over 6% on the previous day.

Thursday could see a rally

Despite the current predicament, Thursday could potentially help improve things. The price of $NVDA before the market opens stands at an elevated $1,017, marking a significant increase from its previous day’s closing price of $949.50.

On the short-term 1-hour chart, Bitcoin is presently shattering the resistance of a bull pennant formation and could be gearing up for another surge toward previous highs. Meanwhile, Ethereum (ETH) has gained over 3% in value on the day and is now just a stone’s throw away from $4,000, representing only a 5.7% difference from its March peak.

If NVIDIA experiences a significant rally on Thursday, the crypto market may follow suit and potentially experience gains as well. The artificial intelligence sector within crypto could particularly prosper from this trend.

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2024-05-23 16:11