Despite the prevailing bearish sentiment, Bittensor’s [TAO] bulls faced challenges as they gave up the $440-$480 support range over the recent month. Just ten days back, this range was tested as resistance, leading to a 26.7% decline in TAO’s value since then.
TAO’s price volatility has surged in the last couple of weeks, mirroring Bitcoin’s [BTC] stability around the $100k mark.
The general lack of optimism in the altcoin market has had a negative impact on TAO, keeping its momentum bearish since December.
TAO Dips Below $354 Before Swift Recovery
Since the latter part of November, the Bollinger bands have shown notable width, signaling increased daily chart volatility. This has translated into rapid and sharp price movements for TAO, contrasting with the trends seen in August.
Although an uptrend was established in November, it was short-lived as TAO’s market structure took a bearish turn.
In January, bulls lost the $434 support level, a significant level when viewed on a weekly basis.
Following this breach, $354 and $216 emerged as critical support levels. While TAO dipped below $354 recently, it quickly bounced back by 14% from its local lows.
However, this rebound may not signal a recovery but rather a minor upturn before the next leg of the downward trend.
The Average True Range (ATR) supported the Bollinger Bands indicator by showing heightened volatility, particularly in the last week. The prevailing selling pressure and bearish market structure indicated a potential for further price declines.
An analysis of the 1-month liquidation heatmap revealed a concentration of short liquidations in the $380-$400 range, aligning with TAO’s recent peak during a brief recovery phase on February 3rd.
Given the weak demand and prevailing bearish trends, a rejection from the $400 resistance range seemed probable. Swing traders may opt to observe Bittensor’s performance around this level before considering short positions.
Disclaimer: The views expressed do not constitute financial, investment, trading, or any other form of advice and reflect solely the author’s perspective.