Can TAO’s ‘Cup and Handle’ Formation Drive Altcoin to $1,000?
Recent weeks have seen Bittensor [TAO] making significant strides upwards, with the altcoin now sitting just 5.1% below its peak of $767.68 on April 11, 2024. Within the last 24 hours, its price has climbed by 1.67%, reaching $725.50.
Moreover, trading volume for TAO has jumped by 17.42%, hitting $641.62 million, indicating increased market activity.
The surge in TAO’s value can be attributed to heightened trading volume and a growing Open Interest, signaling a rise in market momentum.
TAO’s Momentum with the Cup and Handle Formation
At the moment, TAO is forming a classic “cup and handle” pattern on the weekly charts, hinting at a potential breakout. The altcoin recorded weekly gains of 16.10%, showing volatility between $661.02 and $741.29.
A significant resistance area lies between $720 and $780, where previous rejections have occurred, making it a crucial level in determining the next move for TAO.
The cup formation, spanning from March to October 2024, suggests accumulation, while the handle pattern from October to November indicates consolidation. If TAO manages to break above $780, it could set its sights on the $1,000 to $2,000 range based on the cup’s depth.
Key indicators like the Stochastic RSI and Awesome Oscillator support a bullish perspective, with the Supertrend indicator also maintaining a positive stance.
However, if TAO fails to breach its resistance, a retracement towards the $600–$550 levels could be expected, presenting an opportunity for re-entry at lower price points.
Optimistic Funding Rates Pave the Way for a $700 Surge
TAO’s funding rate trends have closely correlated with its price movements. Initially neutral, the funding rate turned negative in September, indicating bearish sentiment.
As TAO began its recovery in late September and October, the funding rate shifted towards predominantly positive, aligning with price gains and an increase in long positions.
In November, the funding rate spiked alongside TAO’s rapid uptick, especially as the price approached the $700 mark.
This positive funding rate continued to fuel momentum, with traders growing more optimistic about the altcoin’s upward trajectory. By December, TAO had surpassed $700, bolstered by moderately positive funding rates – a sign of sustained bullish sentiment.
Upbeat Spot Inflows Could Drive TAO’s $800 Rally
Spot inflows have played a pivotal role in TAO’s recent rally. From February to June 2024, significant outflows resulted in price drops due to substantial selling pressure.
However, spot inflows surged by October, peaking at over $12 million in late November, indicating a strong accumulation phase. This influx of spot capital has been instrumental in supporting TAO’s climb from $400 to above $700.
Sustained positive netflows throughout November and December have created favorable conditions for further growth. With these encouraging inflows and the current market momentum, TAO could be well-positioned to break through the $800 resistance level and achieve new highs.