Despite experiencing a 22.01% decrease in the past week and a 5.24% drop on the daily chart, TAO has not fully embraced a bearish trend. The market has not been completely dominated by bears, indicating a chance for a rebound.
Recent analysis suggests that the bearish sentiment surrounding TAO is starting to diminish, hinting at a potential return to its bullish path.
Formation of Dual Patterns and the Possibility of a Rebound for TAO
At the current moment, TAO is situated within a bullish pattern, a phase that will conclude once it breaches the upper resistance line.
Prior to this break, TAO is anticipated to undergo a slight decline towards the support level at $551.00. This support level holds significance as it could provide the impetus needed for a bullish recovery. It also coincides with the support of the bullish symmetrical pattern in which TAO appears to be operating.
A successful bounce from this support level might propel TAO to new highs, potentially touching the pattern’s peak at $748 when the bullish momentum gains strength.
Sustained Bullish Sentiment for TAO
Despite recent declines, the Parabolic SAR (Stop and Reverse) indicator has consistently displayed a bullish stance, with its dots consistently positioned beneath the asset’s price.
The Parabolic SAR serves as a technical tool to determine trend direction and potential reversal points, placing dots above the price during downtrends and below it in uptrends.
The continuous presence of dots below the price during the decline implies ongoing accumulation, which is expected to positively influence TAO’s price, potentially driving it higher from its current level.
Confirming this bullish trajectory, the Chaikin Money Flow (CMF) indicator indicates that buyers have been dominant.
Recently, the CMF line rebounded from zero to 0.03, with the upward trend line maintaining strength, suggesting a probable continuation of TAO’s upward movement.
Gradual Market Re-entry for TAO
Despite the ongoing bullish run, TAO has not yet solidified its market position as participants are slowly returning to the market. Two significant metrics—Open Interest and Funding Rate—illustrate this trend.
Open Interest, which monitors the number of open derivative contracts to identify prevailing market sentiment, has risen by 0.25%, reaching $230.37 million.
This increase aligns with the upward movement in the Funding Rate, currently at 0.0168% on the 8-hour chart.
This indicates consistent buying activity among bulls, contributing to market stability and potentially propelling TAO’s price higher in the upcoming trading sessions.