Top AI-based cryptocurrency tokens tumbled after AI chip giant Nvidia Corp. (NASDAQ:NVDA) reported higher-than-expected earnings for the first quarter Wednesday.
What Happened: Render (CRYPTO: RNDR), the token with the "most significant" ties with the tech giant, was trading 3.79% lower at the time of writing, according to data from Benzinga Pro.
The token made gains ahead of the earnings announcement, rising to a two-month high of $11.81. However, profit-hungry traders locked in gains immediately after
RNDR's trading volume nearly doubled in the last 24 hours, surpassing meme powerhouse Shiba Inu (CRYPTO: SHIB)
According to on-chain analytics firm Santiment, whale engagement with the AI token was rising. An investor with significant RNDR holdings sent nearly 4.9 million tokens to an unknown wallet earlier, potentially selling them off.
Whale activity has been high among the #AI sector, and #Render has been no exception. A known whale sent 4.89M $RNDR (worth $52.1M) to an unknown wallet earlier today as prices corrected. Those holding this asset should watch for increased volatility. pic.twitter.com/EG1Rd1HhcA
— Santiment (@santimentfeed) May 23, 2024
Santiment alerted that holders of the token should brace for higher volatility ahead.
Why It Matters: An X user going by the pseudonym CryptoDNA underlined the factors behind RNDR's dip after Nvidia's blockbuster first-quarter earnings.
"Leverage is the reason we dipped. Imagine how many investors entered into 100x longs after the very bullish earnings call. You think the Market Makers would make it that easy?" the analyst commented.
Why did $RNDR dip after bullish #NVIDIA earnings? Those are the DMs I've received..
— @CryptoDNA (@CryptoDNA_) May 23, 2024
And here's my response: LEVERAGE, leverage is the reason we dipped. Imagine how many investors entered into 100x longs after the very bullish earnings call. You think the Market Makers would...
That said, the analyst assured that "there's nothing to worry about" as it's part of the ebbs and flows of the market.
"We're going so much higher, and RENDER will lead the entire AI sector. I've never been so bullish in my life, and my entire portfolio is built around RNDR."
The analyst's assertion had merit as the number of traders longing RNDR started increasing in the last few hours, according to data from Coinglass. This suggested a belief in the token's upside potential.