Crypto Market Corrects as AI Sector Leads the Decline

Corrective momentum in the cryptocurrency market has become more pronounced for a second consecutive trading day, erasing the cautious optimism of previous sessions. Data from SoSoValue paints a panoramic picture of a broad-based decline, where selling pressure is no longer concentrated in a few segments but has spread throughout the entire market.

The epicenter of this downturn is the AI sector, which has been one of the most talked-about narratives recently. This segment led the decline with a 4.48% correction in 24 hours. Major projects in the space like Bittensor (TAO) and Worldcoin (WLD) recorded significant drops of 3.98% and 4.05%, respectively. However, there was a rare bright spot as KAITO managed to buck the trend with a slight 1.11% gain.

The weakness was not limited to specialized sectors. The two market leaders also succumbed to the general trend. Bitcoin (BTC) fell 1.44% over the past 24 hours, breaking below its previous consolidation range to trade in the $105,000 region. Ethereum (ETH) faced even stronger pressure with a 3.14% drop, at one point falling below the psychological $2,400 level.

The red has engulfed most other key segments, indicating a distinct "risk-off" sentiment:

DeFi: Dropped sharply by 4.14%, with one of its key projects, Uniswap (UNI), falling by as much as 8.16%.

Meme: Down 4.05%, with Fartcoin (FARTCOIN) and SPX6900 (SPX) continuing their deep correction, falling 11.66% and 10.45% respectively.

Layer-2: Down 3.42%, led by a 5.34% drop in Optimism (OP).

Layer-1: Down 3.05%, with major tokens like Solana (SOL) and Cardano (ADA) falling 4.15% and 4.73%.

Even the previously resilient CeFi and PayFi sectors reversed their gains, declining by 2.03% and 2.70%.

Data from SoSoValue's sector indices further reinforces this bleak picture, with the ssiDeFi, ssiAI, and ssiMeme indices among the sharpest fallers. Overall, the crypto market is entering a more pronounced corrective phase. Investors will now be closely watching key support levels to gauge whether this is a short-term pullback or the beginning of a deeper downtrend.