Artificial Superintelligence Alliance (FET) Price Holds Steady Despite Nvidia Subpoena
FET and Nvidia Correlation | Credit: Rob Anderson
Key Takeaways
- The Department of Justice issued a subpoena against Nvidia (NVDA) on Sept. 4.
- Nvidia (NVDA) earnings were higher than expected on Aug. 28.
- Does the FET price share any correlation with NVDA?
Nvidia has been one of the best-performing stocks in 2024, increasing over 110%. This trend has extended to Artificial Intelligence (AI) tokens, particularly throughout August.
However, the Artificial Superintelligence Alliance (FET) price declined on Aug. 28 despite a positive earnings report for NVDA and has fallen since. Nevertheless, this NVDA trend was not exacerbated with the Department of Justice (DoJ) subpoena on Sept. 4. FET is the third-largest AI cryptocurrency and recently completed a major merger.
Is there a correlation between the FET price and that of NVDA, and if so, does that also translate to its earnings? Let’s find out.
NVDA Earnings and Subpoena
On Aug. 28, Nvidia reported $30 billion in revenue for the second quarter of 2024. This increased 15% from the first quarter and 122% from the second quarter of 2024. The performance was also better than the $28.7 estimations from analysts.
Other positive indicators were the higher diluted earnings per share, up 12% from the first quarter and 168% from the second quarter last year.
Interestingly, investors seemed disappointed by this performance, as was reflected in the stock price. The NVDA price fell over 4% on Aug. 28 (black icon) and has resumed its downward movement.
Despite this decline, the price of NVDA has increased over 112% since the start of the year and is only 25% below its all-time high.
An interesting development is the fact that the price did not fall after the subpoena announcement on Sept. 4, which relates to its antitrust practices.
The FET price showed similar price action. While it fell on Aug. 28, it held steady on Sept. 4. It is worth mentioning that AI tokens have been the best-performing category in August.
FET Holds Above Support
One reason for FET’s underperformance could be the lack of correlation between the FET price and that of NVDA. Since the start of the year, the correlation coefficient (blue) has moved from negative to positive several times.
This is in line with a previous analysis that determined that AI tokens did not respond to higher or lower-than-expected NVDA earnings. While there have been periods where there is a perfectly positive correlation between the two, they are few and far between the negative correlation.
Despite the negative performance, FET’s daily chart still paints a positive outlook. The price has increased since Aug. 5, when bullish divergences in the RSI and MACD (green) catalyzed an upward movement.
Shortly afterward, the FET price reclaimed the $1.10 area, which will likely act as support in the future.
To confirm its bullish trend reversal, FET has to break out from its long-term descending resistance trend line, which has existed since April.
So far, FET has made three unsuccessful breakout attempts (black icon). A close above the trend line could trigger an increase toward the 0.5 Fibonacci and horizontal resistance level of $2.10.
Since the start of the year, the FET price movement has shown no correlation to the NVDA price, explaining the lack of reaction to the positive earnings. In isolation, the FET price shows bullish signs but needs to break out from its descending resistance trend line to confirm its bullish trend reversal.
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