In brief
- The total crypto market cap grew by $250 billion in under a week to $3.297 trillion, fueled by Bitcoin breaking above $92,000 and ending the year-end slump.
- Analysts say Sui’s rally is driven by Layer-1 ecosystem momentum, while XRP gains stem from expectations of institutional adoption and regulatory clarity.
- The rotation into AI tokens like Render, with weekly gains over 50%, signals a broader risk-on shift, though prediction markets remain skeptical of an imminent “alt season.”
A sudden surge in buying pressure is lifting the broader crypto market, with Bitcoin’s 2026 push above $93,000 ending the year-end slumber and raising all ships.
The total crypto market capitalization has swelled by $250 billion to $3.297 trillion in less than a week. Among the altcoins leading the charge are Sui, up 16.6% over the past 24 hours, and XRP, which has notched 10.5% gains in the same period, according to CoinGecko data.
“Sui is benefiting from renewed risk appetite in altcoins, driven by strong ecosystem momentum, rising on-chain activity, and positioning around high-throughput Layer-1s going into 2026,” Shivam Thakral, CEO of Indian exchange BuyUCoin, told Decrypt.
XRP, on the other hand, is surging on “expectations of deeper institutional adoption, improving regulatory clarity, and growing use in cross-border payments,” Thakral added. He highlighted that both altcoins are riding a “mix of narrative strength and post-year-end capital rotation.”
Altcoins gain, but traders cool on alt season
The rotation extends beyond these leaders.
While meme coins were the first to react to the market uplift, AI-related tokens such as Render and Virtuals Protocol followed suit, clocking upwards of 50% gains in the past week.
“The recent surge in AI tokens reflects a broader shift back to risk-on behavior across crypto markets,” Ryan Li, CEO of AI platform Surf, told Decrypt. He noted that the Crypto Fear and Greed Index has moved from fear to neutral for the first time since November, indicating “increasing appetite for riskier assets.”
Li explained that AI tokens outperforming can be seen as capital rotating toward assets viewed as more future-facing. “Additionally, Elon Musk’s New Year’s Day praise of Nvidia CEO Jensen Huang on X helped concentrate attention and capital in AI tokens amid the broader altcoin rally.”
Despite the uptick, some sentiment indicators remain cautious. Users on prediction market Myriad—owned by Decrypt’s parent company, Dastan—assign only a 17% chance to a full “alt season” kicking off in the first quarter of 2026.
What’s next?
Analysts also tempered expectations with a cautious stance.
“As the market enters January, investors should expect elevated volatility driven by portfolio rebalancing and renewed risk appetite following year-end positioning.” Lacie Zhang, market analyst at Bitget Wallet, told Decrypt. “Capital is likely to rotate selectively toward higher-conviction sectors such as DeFi, AI-linked protocols, and blue-chip Layer 1s, rather than broad-based speculation.”
Both Thakral and Zhang highlighted regulatory developments, behavior of exchange-traded funds, and digital asset treasury as key catalysts that could sway this trend.
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