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Cryptocurrency News Articles
Bittensor (TAO) Breaks Out of Descending Channel, But RSI Divergence Signals Potential Correction Ahead
Oct 09, 2024 at 10:30 pm
Bittensor [TAO] has seen growth, with a 300% price increase that has captured the attention of both traders and investors. As of press time
Bittensor [TAO] has seen a 300% price increase in recent times, attracting the attention of traders and investors alike. At press time, TAO was trading at $601.10, with a 24-hour trading volume of $216.9 million. Although the price showed a 4.07% decrease in the last 24 hours, it has risen by 9.34% over the past week.
With a circulating supply of 7.4 million TAO tokens, the market capitalization of Bittensor stood at $4.43 billion at press time. One major reason behind TAO’s recent surge is the rapid expansion of subnets on the network. Introduced just a year ago, subnets have become crucial to Bittensor’s development.
Currently, there are over 50 active subnets on mainnet and more are expected to launch soon. These subnets have enhanced the network’s capacity, attracting developers and users, which in turn boosts TAO’s overall market performance.
TAO recently broke out of a descending channel, which has been a key catalyst for its bullish trend. As noted by Roman, a crypto analyst, there is some bearish divergence between TAO’s price and RSI, which could signal a potential correction ahead.
However, as Roman also mentioned, “Don’t be afraid of some correction, $TAO is up 300%.” Key support zones can be identified around the $300 level, which previously acted as both resistance and support during the token’s rally.
This level could serve as a base if a correction occurs, helping stabilize TAO’s price. On the upside, resistance hovers between $580 and $600.
A sustained break above these levels could trigger a new leg higher for TAO, especially if broader market conditions remain favorable. TAO’s price action has shown some correlation with Bitcoin [BTC], which could play a role in determining the next moves for TAO.
If Bitcoin sees a correction, Bittensor could experience more volatility, as noted by Roman, who also expects Bitcoin to face short-term downward pressure.
However, a strong recovery in Bitcoin, especially a push above the $65,000 mark, could drive bullish sentiment across the market, benefiting altcoins like TAO.
Investors are advised to keep an eye on Bitcoin’s performance as a key indicator for broader market trends. While Bittensor’s bullish trend remains intact, technical indicators show potential for consolidation.
The Awesome Oscillator (AO) remains positive, though the shrinking green bars suggest weakening bullish momentum. At the time of this writing, the Relative Strength Index (RSI) was at 64.65, keeping TAO in bullish territory but nearing overbought levels.
The Aroon Up is high at 85.71, indicating strong upward momentum, while the Aroon Down at 57.14 suggests some bearish pressure.
These mixed signals indicate that while the overall trend is still positive, TAO could see a short-term pullback before resuming its upward movement.
Traders may need to monitor these indicators closely for signs of any potential trend reversal. On-chain data shows that on the 9th of October, TAO experienced a net outflow of -$725.36K, indicating that more tokens are leaving exchanges than entering.
This outflow suggests that holders are moving TAO tokens into personal wallets, potentially signaling a reduction in selling pressure.
Despite this outflow, TAO’s price remains strong, reflecting continued market confidence in the token’s future performance.
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