Bittensor Darts Through $296 as AI Narrative Meets Technical Crossroads
Market Structure Shifts Higher
- The total trading volume for TAO coin exploded to 10 billion, driven by increasing institutional interest in crypto products.
- Key moving averages were easily recovered, returning to important psychological levels.
- Bulls are now defending the higher lows they established.
After slipping a tad on week-over-week trade, alt season struck back with a furious makeover, driving the majority of the public’s favorite altcoins 5-35% higher in mass breakouts and setting DeFi darling Ethereum up for a break toward new all-time highs. An overall market cap boost to above $2 trillion underscores both the raucousness that is in the pipeworks and the hatred for cash that still unmistakably reigns over vast portions of boosting brands. Performance does not lie. The outperformance by non fungibles and non fungible-related assets has yet to make everything abundantly clear.
| Metric | Value |
|---|---|
| Asset | BITTENSOR (TAO) |
| Current Price | $296.10 |
| Weekly Performance | 5.71% |
| Monthly Performance | -32.87% |
| RSI (Relative Strength Index) | 39.7 |
| ADX (Average Directional Index) | 23.4 |
| MACD (MACD Level) | -22.89 |
| CCI (Commodity Channel Index, 20-period) | -63.53 |
Momentum Resets to 39.68 After Testing Oversold Territory
With the oscillator reading at 39.68, momentum is seen by traders as not overly extended or washed out – a Goldilocks-like scenario that often comes before significant moves. This measure recently rebounded from deeply oversold levels below 30, with readings similar to those in August when the TAO enjoyed a multi-week recovery from about the same level. One observation is how the RSI performed during the recent selloff – it registered lower readings than the correction in October, indicating potential for a washout.
For swing traders, this equilibrium RSI indicates that there is room for upside or downside. The overbought conditions get relieved and the ramp in volume from the ETP launches and the crowdfunding platform news can create a scenario where we build solid momentum without becoming immediately overbought. TAO’s strongest moves have typically started from RSI levels in the high 30s/low 40s so the current levels are certainly noteworthy for mid-term traders.
ADX at 23.39 Signals Shift From Chop to Trending Conditions
With ADX at 23.39, the current trend is strengthening, although it’s not yet a level that would indicate overextended conditions. Being in this vicinity suggests TAO is moving off the higher-low, “sideways” phase it spent most of late December in, and into a more actively-trending phase. Reading above 20 suggests the flat, meandering path begins to curve ever so subtly higher – the pulse grows.
In plain language, the ADX is showing that a shift from a sideways market to a more directional one is in the works but we don’t know which way that will be. The fact that more buyers are coming in via exchange-traded products while trend traders tighten their grip means the balance is shifting. As a day trader, you should adapt your approach to this – meaning you shouldn’t be surprised to see an increase in intraday volatility as well as some stop-hits.
20-Day EMA at $320.84 Becomes First Major Test for Recovery
The $330 to $340 region is likely to act as a significant pivot zone; it held as support from mid-October through late November. If TAO can reclaim and hold above this level, it would alleviate short-term oversold conditions, potentially paving the way to a test of the $360 to $370 pivot area. This neighborhood provided both support and resistance throughout November and early December.
From a longer-term perspective, the 200-day EMA resides at $355.26, or $59 higher than the current price. At 20%, the bulls have their work cut out for them as this paints a clear image of the type of potential price discovery to the upside that would take place upon a new breakout. With the 10-day and 20-day EMAs pinching, when price resolves to the upside or the downside of this cluster going for a test of the 200- and 55-day EMAs, 15-day ‘market structure’ will likely change. Given the momentum AI narrative and the recent Bittensor write-up, the bulls bulls have the ball for now.
Resistance Stacks Heavy Between $340 and $370
The nearest resistance is found at the $340 – $370 zone, where December’s breakdown point coincides with the 50 and 200-day EMAs. This gives a solid resistance that trapped buyers several times during the downtrend. Above this, the monthly pivot R1 at $372.27 offers another possible rejection zone, while psychological round numbers at $400 will most likely lure sellers if the price continues to rise.
Bullish investors protect various levels of support. First, there is the low that was reached recently at $260.60. It was able to maintain itself against intense bearish pressure. Secondly, the weekly pivot point is at $297.36, slightly above the current price. If a turnaround were to occur, this support would have to be maintained above all costs. In addition, there is the monthly S1 at $248.73, if worst comes to worst. Breaking through this mark would likely result in the price dropping to $200.
Most important the price structure indicates buyer control as long as they hold above $290 in any pullback. The increase in institutional demand via the Safello ETP and Bitstarter crowfunding platform provides underlying pressure which did not exist during the November break. This setup looks to be forming a possible inverse head and should pattern with the neckline at $340 – a break above that level would target $420 on the measured move.
Bulls Need Sustained Close Above $320 to Confirm Recovery
Buyers need to push the Energy Web Tokens price above $320.84 to cross the resistances between current levels and $400. Renewed interest in Bitcoin could push ETP up and temporarily break through overhead resistance before the 50-day EMA at $345 forms the next roadblock. Note that the $338 – $343 price zone could pose some resistance until that level is hit.
If the bearish scenario plays out, aggressive trading buys below $250 can bucket-added to $240, with another bucket in the old consolidation below $220. If full base collapse ensues, I expect major support at $180.
Considering recent developments, likely price discovery consolidation between $290-$320 prior to any mark-up. New overhead supply is still extremely low, but old supply is still present. News that should spur price discovery up toward the next level include AUM reports from XNT Limited, NEXO, Larsen Finance and Turing Trust, with more info on the DAO overall position coming soon.
