Bittensor’s TAO token rose 10.2% on Tuesday, leading a broader rally among AI-focused cryptocurrencies following a geopolitical announcement from U.S. President Donald Trump. Artificial Superintelligence Alliance (FET) and Render (RENDER) gained 6.2% and 4.8%, respectively, over a 24-hour period. Aptos (APT), LayerZero (ZRO), and World Liberty Financial (WLFI) also recorded notable gains as the total crypto market capitalization surpassed $2.5 trillion, according to CoinGecko data.
The immediate trigger for the market move was Trump’s announcement of a five-day pause on planned strikes against Iran’s power plants, accompanied by claims of “productive conversations” between the two countries. The statement sent oil prices falling by more than 13%, sparking a relief rally across risk assets broadly. The sharp drop in oil prices reduced near-term fears of an escalating conflict and encouraged investors to move back into higher-risk positions.
However, Iran‘s foreign ministry quickly contradicted Trump’s account, stating there was “no dialogue” between Tehran and Washington. Iran’s parliament speaker Mohammad Bagher Ghalibaf echoed that denial, adding further uncertainty to the situation. Oil prices subsequently reversed course, climbing back above $100 a barrel, and the crypto market saw over $670 million in liquidations within a 24-hour window. Short positions made up more than half of that total, accounting for approximately $370 million.
The wave of short liquidations hit certain tokens particularly hard. Derek Lim, head of research at crypto market-making firm Caladan, said the squeeze propagated “hardest into higher-beta names where positioning was already most compressed.” He also identified Nvidia CEO Jensen Huang‘s GTC conference the previous week as a secondary catalyst, noting that the convergence of the two events provided additional tailwinds specifically for the AI sector.
Despite the sharp single-day gains, analysts caution against expecting a sweeping altcoin rally. Any so-called “alt season” is expected to remain narrow, confined to tokens with strong narratives or fundamental backing rather than spreading across the broader market. The current environment, shaped by conflicting geopolitical signals, continues to weigh on investor sentiment more generally.
Illia Otychenko, lead analyst at cryptocurrency exchange CEX.IO, said that contradictory statements surrounding the Iran situation are fueling risk aversion. “That uncertainty is keeping oil prices elevated and lowering expectations for rate cuts,” he said. With both oil prices and Treasury yields rising, inflation remains a central concern for markets. Otychenko noted that this dynamic is “not that bad for Bitcoin due to its store-of-value narrative.”
Bitcoin continues to hold near $71,000, up 0.3% over the past 24 hours according to CoinGecko. Otychenko warned, however, that a more complex scenario could emerge if oil prices and Treasury yields begin moving in opposite directions. Such a divergence, he said, “would create a more complex macro backdrop that could test Bitcoin’s store-of-value narrative as it would put significant pressure on most assets except bonds and the U.S. dollar.” Users on prediction market Myriad reflected the prevailing uncertainty, placing only a 44% probability on a spring crypto rally.
Originally reported by Decrypt.
