Bittensor has emerged as a standout AI project in recent months, even as Nvidia, a key player in the AI revolution, experiences a slowdown. But what is the current status of Bittensor’s TAO token?
Exceptional Performance of TAO Token
Between October 2023 and March 2024, the TAO token of the Bittensor project showed exceptional performance. Fueled by AI-related fundamentals, it gained significant investor interest, outperforming even Bitcoin.
Major Correction Phase
Since the second quarter of 2024, the TAO token has entered a major correction phase. After reaching its all-time high on April 11, 2024, TAO has retraced by about 70%. Currently ranked 54th among cryptocurrencies with a market cap of $1.9 billion, Bittensor seems to have lost some investor appeal. So, where does TAO stand technically?
Technical Analysis of TAO
The retracement has pushed Bittensor’s prices into a medium/long-term accumulation zone. With a low around $20, TAO could consolidate between the 0.618 ($300) and 0.786 ($200) Fibonacci retracement levels.
Although the major polarity level for TAO is at $400, the rational accumulation zone mentioned is suitable for planned purchases. Key levels include:
- Confluence zone between 0.618 Fibonacci and the 7-week moving average (red).
- Confluence zone between 0.786 Fibonacci and the January 2024 lows (green).
Recently, Bittensor has shown significant deterioration. To regain positive momentum, it must break above $400. Conversely, a close below the January 2024 lows would shift the trend to a bearish one.
Competitive Pressure in the AI Crypto Market
TAO operates within the AI narrative, a sector that has seen a surge in new crypto projects recently. Notably, Singularity, Fetch.ai, and Ocean Protocol, established AI projects, announced a merger in March 2024 to leverage their strengths and enhance competitiveness. This merger is expected to create a new token, ASI.
This announcement has impacted Bittensor’s price, causing significant capital transfers away from TAO. The TAO/FET ratio has been flat for weeks, indicating a competitive struggle. The winner could become the leading AI narrative in the crypto market.
Conclusion
In summary, Bittensor’s TAO token is facing challenges. Its relative strength in the ecosystem has waned amidst fierce competition. Nevertheless, TAO remains in an upward long-term trend and within a rational accumulation zone. Active investors should wait for stronger signals before committing capital.
