Bittensor (TAO) is in an active downtrend, trading around $252, down nearly 3% at the time of writing on Tuesday. Sentiment around the crypto artificial intelligence (AI) market has remained quite gloomy since last week, following the exit of subnet developer Covenant AI.
Covenant AI founder Sam Dare cited concerns about decentralization and alleged punitive actions by Bittensor co-founder Jacob Steves. TAO suffered a major decline following the exit of Covenant AI, which is impacting the price.
Renewed retail interest could lift Bittenser’s outlook
Retail investors are increasing their risk appetite after Bittensor’s derivatives cooldown last week. TAO futures OI stood near $400 million on Tuesday, up from nearly $390 million the previous day.
The ever-expanding derivatives market serves as a foundation for continued price corrections, strengthening investor confidence and supporting long-term growth in risk assets like Bittensor.
Technical Outlook: Bittensor is testing important support
Bitcoin trades at $252, which has a bearish bias in the near term as the price remains below the 50-day, 100-day and 200-day exponential moving averages (EMAs) that hover around $259 and $276. The alignment of the overhead moving averages suggests that recovery efforts are likely to be limited for now, especially given the Relative Strength Index at 40, which indicates moderately weak momentum.
Additionally, the Moving Average Convergence Divergence (MACD) remains in the negative zone, suggesting that downside pressure remains despite selling gradually tapering off.
At the top, TAO’s initial resistance is seen at the 100-day EMA around $259, followed by the 50-day EMA around $268 and then the 200-day EMA at $276. A sustained break above the EMA bands would be required to undercut the current bearish structure, with further resistance at the 38.2% Fibonacci retracement of the broader downswing at $295 and higher resistance towards the 50% retracement at $342. On the downside, immediate support lies at the 23.6% retracement near $238, with a deep bearish extension highlighting the previous cycle’s low area around $145.
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(The technical analysis for this story was written with the help of AI tools.)
