The TAO Cryptocurrency from Bittensor Approaches Critical Level of $488, Signaling Possible Reversal in Price
The TAO token from Bittensor has been showing consistent underperformance across various timeframes, experiencing a decline of 14.22% on a monthly basis. In the most recent daily trading session, TAO extended its losses by 5.05%, indicating a continued downtrend.
Previous analysis had already indicated that TAO was in a precarious position, with the current price drop seemingly influenced by broader market weaknesses, making the asset susceptible to further declines.
Is TAO Capable of Maintaining its Position at the Critical Support Level?
At the current moment, TAO is trading at a crucial support level of $488.4, a zone that has previously instigated significant price reversals. This level has acted as a starting point for price rallies in the past, and traders are closely monitoring TAO’s third attempt at testing this support.
If historical patterns repeat themselves, a successful rebound could propel TAO towards $682.2. However, failure to sustain this level might lead to additional price drops. Initial downside targets are set at $403.4, with a potential further decline to $355.8 if selling pressure continues to increase.
To predict the next moves for TAO, CryptoCrypto has analyzed additional metrics and highlighted crucial factors that could determine the asset’s future trajectory.
Bearish Sentiment Takes Control of TAO
Market sentiment surrounding TAO has turned bearish according to analysis using Coinglass data. Over the past day, TAO’s Exchange NetFlow has become positive, suggesting more tokens have been deposited into exchanges than withdrawn. This often indicates potential sell-offs as traders prepare to sell their holdings.
Alongside this, there have been significant long liquidations, with a higher value of long positions closed compared to short positions. This imbalance implies that traders anticipating a rally have exited their positions due to increasing bearish pressures.
An examination of the Long-to-Short ratio further reveals a negative sentiment, with more traders betting on TAO’s decline rather than its recovery, showcasing a rising pessimism among market participants.
Indicators Corroborate On-Chain Data
Technical indicators support the bearish outlook for TAO, with tools like Moving Average Convergence Divergence (MACD) and Bull Bear Power indicating a strong presence of sellers in the market.
The MACD has displayed a “death cross,” a bearish sign occurring when the blue MACD line crosses below the orange signal line. This pattern typically anticipates a momentum decrease, reinforcing the downswing.
Furthermore, the Bull Bear Power indicator emphasizes the prevalence of bearish sentiment, with increasing red momentum bars signifying control by sellers and a deepening bearish outlook.
Given these technical metrics, the prevailing market sentiment remains negative, suggesting a likelihood of further declines for TAO.