Bittensor's native token, TAO, has extended its losing streak to four sessions, slipping below the $240 mark as retail enthusiasm for the AI-focused cryptocurrency continues to cool. The token is now trading near a critical support zone that could dictate whether prices stabilize above $200 or slide further.
Derivatives Data Signal Weakening Demand
Data from CoinGlass reveals a sharp contraction in TAO futures activity. Open interest fell more than 6% over the past 24 hours to approximately $252.08 million, indicating that traders are closing positions rather than initiating new ones. This pullback in speculative demand underscores a more cautious market environment.
Liquidations over the same period totaled roughly $1.67 million, with long positions accounting for the majority at $1.48 million. Funding rates have also declined to 0.0018%, suggesting reduced appetite for leveraged bullish bets. Trading volume dropped by 14%, further confirming the retreat in participation.
Similar patterns have been observed across the broader crypto market. For instance, Cardano's derivatives data also points to limited upside, reflecting a broader risk-off sentiment among traders.
Technical Picture: Bearish Signals Mount
On the 4-hour chart, TAO has lost 6% of its value in the last 24 hours and is trading below both the 50-day exponential moving average (EMA) near $251 and the 200-day EMA near $265. The token has been trending lower since encountering resistance around $290.
Despite the recent weakness, TAO remains above the 20-day simple moving average (SMA) at approximately $231. This level also serves as a key technical support. A decisive breakdown below $231 could trigger a deeper correction toward the $196 support level.
The Relative Strength Index (RSI) is hovering below the neutral 50 mark, indicating growing bearish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram remains in positive territory but is contracting, suggesting that the bullish momentum from last week's recovery attempt is fading. This combination reinforces the view that the recent bounce was corrective in nature.
Key Levels to Watch
For TAO to regain upward traction, buyers must push the token above major resistance levels. The first significant hurdle sits at $278, with a move above that potentially opening the door to $281. On the downside, the $231 support zone is the most critical level for bulls to defend. A break below it could expose TAO to a decline toward $200 and lower.
Investors should also keep an eye on broader market dynamics. For example, Bitcoin's recent drop below $60,000 amid ETF outflows and macro jitters has contributed to a cautious tone across the crypto space.
While TAO's long-term fundamentals remain tied to the growth of decentralized AI networks, the near-term price action is being driven by deteriorating sentiment and reduced retail participation. Traders will be watching closely to see whether the $231 support holds or gives way to further downside.
This article is for informational purposes only and does not constitute financial advice.
