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Bittensor (TAO) loses momentum: Crypto analysis of April 4, 2024

Thu 04 Apr 2024 ▪ 6 min of reading ▪ by Family Trading Partnership
Getting informed Investissement

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

Logo TAO encadré par une loupe avec en fond un graphique en couleur ainsi qu’un taureau et un ours blanc.

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 surge can be partly attributed to the general excitement around the artificial intelligence sector. Moreover, this increase in value has boosted its popularity, allowing Bittensor to build on a $213 support to reach a new all-time high at $757.

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

As of writing this, Bittensor is trading at around $570. Although this rise may seem encouraging, the short-term structure of the cryptocurrency remains bearish. This downturn has pushed TAO below its 50-day moving average. Although it is still trending upward, this has raised questions about the solidity of the medium and long-term trend of the cryptocurrency. Clearly, the dynamics of TAO have 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 could represent an opportunity for contrarian investors.

TAO/USDT Daily Chart
TAO/USDT Daily Chart

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 significantly diverged from its price. While the latter has dropped by about 35%, the open interest on TAO/USDT perpetual contracts has almost doubled, increasing by $16 million in positions. This dynamic indicates that the recent drop in the cryptocurrency has spurred increased interest in the derivatives market. It is plausible that this reflects an increase in short positions, potentially amplifying the existing bearish pressure. However, the predominance of long position liquidations during this drop, coupled with a slightly rising funding rate, paradoxically suggests that some speculators see this drop as a buying opportunity, anticipating a reversal of trend in the medium or long term.

Open Interest & Liquidation and Funding Rate TAO/USDT
Open Interest & Liquidation and Funding Rate TAO/USDT

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

TAO/USDT Liquidation Heatmap (1 month)
TAO/USDT Liquidation Heatmap (1 month)

Hypotheses for the Price of Bittensor (TAO)

  • If the price of Bittensor stays above $470, we could expect a continuation of the bullish trend up to $645. If this level is breached, the next bullish target could be the $700 threshold or even reaching its all-time high at $760. At this stage, it would represent an increase of over 26%.
  • If the price of Bittensor fails to hold above $470, we might consider a retreat to around $415. If the bearish movement continues, the next support level to consider would be at around $350. At this level, the drop would be about -41%.

Conclusion

Bittensor has had an exceptional rise, spurred in part by the buzz for artificial intelligence. However, after hitting an all-time high of $757, a decline has lowered its value below the $525 threshold, causing concerns among investors. Despite the recent dip, Bittensor’s rebound above $500, combined with its leadership position, could attract investors looking for opportunities. Nonetheless, it is crucial to closely monitor the price reaction to key levels to confirm or refute the current hypotheses. It’s also important to remain vigilant for potential market “fake outs” and “squeezes” in each scenario. Finally, let’s remember that these analyses are based solely on technical criteria and that cryptocurrency prices can also move swiftly due to other more fundamental factors.

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Family Trading avatar
Family Trading

Family Trading est une Communauté de traders a compte propre active depuis 2017 offrant Lives, contenus éducatifs et entraides autour des marchés financiers dont celui des cryptomonnaies avec à ses côtés Elie FT, investisseur et trader de passion sur le marché crypto.

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