While the cryptocurrency market is experiencing notable growth in AI-focused tokens such as Render (RENDER) and Near Protocol (NEAR), which have surged by 42% and 18%, respectively, over the past 30 days, Bitttensor ($TAO ) has been moving contrary to the broader trend, declining by more than 15%.
Bitttensor (TAO) Approaches Key Support Zone Amid Correction
Following a recent peak of $625 on November 12, TAO has undergone a correction, losing more than 20% of its value. As of now, the token is trading at approximately $487, with its price finding support within the critical range of $480 to $492. This price zone marks an important inflection point for the token’s short-term price action.
The chart reveals that TAO has been constrained within a descending channel for several weeks, and as the price nears the lower boundary of its support zone, two potential scenarios are emerging:
Bullish Scenario: Should TAO manage to hold above the $480-$492 support range, a rebound could occur, propelling the price toward the upper trendline of the descending channel. In this case, a recovery to the $580 mark would imply a potential 19% upside from current levels.
Bearish Scenario: Conversely, if TAO fails to maintain this critical support zone, further downside could follow. The next significant support level is around $409, signaling the potential for a deeper correction of approximately 16%.
Key Factors to Monitor Going Forward
The $480-$492 support zone will be crucial in determining the direction of TAO’s price action in the near term. Key indicators to watch include:
Relative Strength Index (RSI): Currently around 36, the RSI suggests that TAO is nearing oversold territory, which could indicate a bullish divergence if buying pressure increases.
Volume Trends: A surge in buying volume could signal a potential reversal in price direction, while declining volumes could indicate continued bearish momentum.
For TAO to reverse its current downtrend, breaking out of the descending channel would be vital. Conversely, failure to hold above the $480 support zone could trigger increased selling pressure, potentially pushing the price lower.
As the situation unfolds, traders and investors will need to closely monitor both technical indicators and market sentiment to gauge the likelihood of either scenario playing out.
