Bittensor (TAO) Loses Momentum: Crypto Analysis of April 4, 2024

After months of spectacular growth, Bittensor is experiencing an unexpected drop in its price for the second consecutive week. Let’s explore together the future prospects of the TAO price.

The situation of Bittensor (TAO)

In less than two months, Bittensor saw a spectacular increase of over 700%, moving from $46 to $394. This remarkable boom can be partly attributed to the general excitement surrounding the artificial intelligence sector. Moreover, this increase in value increased its popularity, allowing Bittensor to build on a $213 support to reach a new high of $757.

After reaching this latest high, the price of Bittensor underwent a correction of almost 40%, taking the price below the $525 support. This drop rightly concerned the most recent investors. However, it is worth noting that the early days of April saw a favorable recovery for the cryptocurrency’s price. Indeed, a renewed interest from buyers was observed when the price hit $470. As a result, TAO managed to climb back above the psychological threshold of $500 to subsequently regain its last support.

At the time of writing, Bittensor is trading at around $570. While this rise may seem encouraging, the short-term structure of the cryptocurrency remains bearish. This decline pushed TAO below its 50-day moving average. Although it is still trending upwards, it has raised questions about the solidity of the cryptocurrency’s medium and long-term trend. It is clear that the dynamics of TAO has been adjusted downwards, as evidenced by both the oscillators and the price of the cryptocurrency itself. Each of these elements seems to support a pessimistic outlook for the future of Bittensor’s price. However, given its leadership position in the sector, this situation may represent an opportunity for contrarian investors.

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today a trainer at Family Trading, a community of thousands of own-account traders active since 2017. It offers lives, educational content, and a collaborative environment around financial markets in a professional and warm atmosphere.

Focus on derivatives (TAO/USDT)

The open interest on TAO/USDT perpetual contracts has deviated significantly from its price. While the latter fell by about 35%, open interest on TAO/USDT perpetual contracts nearly doubled and increased positions by $16 million. This dynamic suggests that the recent decline in the cryptocurrency has spurred increased interest in the derivatives market. It is plausible that this reflects an increase in short positions, possibly reinforcing the existing bearish pressure. However, the dominance of long position liquidations during this decline, together with a slightly rising funding rate, paradoxically suggests that some speculators see this decline as a buying opportunity, expecting a reversal of trend in the medium or long term.

The liquidation heatmap for Bittensor over the past month shows that TAO has recently breached a significant liquidation zone, with a price range between $510 and $560. The fact that TAO has regained ground above this threshold indicates a resurgence of buyer interest at this price level. Currently, the main liquidation zone above the current price is found between $615 and above, around $760. Below the current price, liquidation zones are visible near $460, and even lower, above $400. If the price approaches these levels, it could trigger a massive volume of orders, raising the possibility of a period of heightened volatility for Bittensor. These zones therefore represent important points of interest for investors.

Hypotheses for the price of Bittensor (TAO)

If the price of Bittensor remains above $470, we can expect a continuation of the bullish trend to $645. If this level is breached, the next bullish target could be the $700 threshold or even reach its high of $760. At this point, this would represent an increase of over 26%. If the price of Bittensor does not hold above $470, we can consider a pullback to around $415. If the bearish move continues, the next support level to consider would be at around $350. At this level, the drop would be around -41%.

Closure

Bittensor has had an extraordinary rise, fueled in part by the buzz for artificial intelligence. However, after reaching a high of $757, a decline has reduced its value below the $525 threshold, causing concern among investors. Despite the recent decline, Bittensor’s recovery above $500, combined with its leadership position, could attract investors looking for opportunities. Nevertheless, it is essential to closely monitor the price reaction at key levels to confirm or disprove the current hypotheses. It is also important to remain alert for potential market “false outs” and “squeeses” in every scenario. Finally, let’s remember that these analyzes are based solely on technical criteria and that cryptocurrency prices can also move quickly due to other more fundamental factors.

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Family Trading is a community of own-account traders active since 2017 that offers lives, educational content and mutual assistance around the financial markets, including that of cryptocurrencies with Elie FT, a passionate investor and trader on the crypto market.

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