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February 5, 2025 by Mutuma Maxwell
- Whale accumulation in TAO signals strong investor confidence amid market shifts.
- Dynamic TAO upgrade enhances decentralization with market-driven emissions.
- Bittensor faces key resistance at $380, with $400 as the next psychological barrier.
Bittensor (TAO), a leading Artificial Intelligence (AI) token, has demonstrated impressive resilience despite recent market fluctuations. After reaching an all-time high of $777 in April 2024, following a massive 2,700% surge in less than a year, TAO faced significant corrections.
However, its rapid recovery continues to signal strong investor confidence. The recent release of the Dynamic Bittensor whitepaper has reignited bullish sentiment, pushing the price upward and reclaiming key support levels.
Whale Accumulation and Price Action
According to analyst CW8900, large investors have been aggressively buying Bittensor long positions, even as the price declined. This buying pressure has contributed to TAO’s rapid recovery, outpacing most other projects in the AI token sector.
The current market movement aligns with a cup-and-handle pattern, which typically signals a potential breakout. If the pattern completes, a significant bullish phase could emerge, reinforcing optimism for an extended uptrend.
Impact of Dynamic TAO Whitepaper
The Bittensor team introduced the Dynamic TAO (dTAO) whitepaper on February 3, outlining a transformative upgrade to the current emission model. This new approach replaces fixed emissions with a market-driven mechanism, allowing subnets to operate more efficiently. The introduction of subnet tokens enables miners, validators, and subnet owners to earn rewards based on staking activity, decentralizing decision-making and reducing central control.
Bittensor enthusiast Dread Bongo emphasized key benefits of the upgrade, including minimized validator handouts, independent subnet economies, and permissionless scaling. This shift is expected to enhance network sustainability while providing greater incentives for active participants.
TAO Price Movement and Key Levels
Over the past 24 hours, TAO has experienced a sharp uptrend, rising by 17.07% to reach $371.13. The price initially spiked from $315 to $380, reflecting strong buying momentum.
Following this rally, the asset consolidated, suggesting that traders are assessing the next move. Minor pullbacks occurred around $360, but strong buying interest helped maintain price stability.
Source: CoinMarketcap
Key support levels to watch include $315, which marks the start of the recent uptrend, and $360, where intraday pullbacks found stability. On the resistance side, $380 remains a critical barrier, having been tested multiple times. If bullish momentum persists, the next major hurdle will be $400, a psychological threshold that could trigger profit-taking.
Technical Indicators Signal Bearish Momentum
TAO/USD daily price chart, Source: Trading view
Despite the price rebound, technical indicators suggest caution. The Relative Strength Index (RSI) stands at 40.51, indicating that bearish momentum still dominates.
Although not yet in oversold territory, the RSI suggests potential for further downside before a strong reversal occurs. Moreover, the Moving Average Convergence Divergence (MACD) remains in negative territory, reinforcing bearish sentiment.
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