Bittensor (TAO) has recently experienced a sharp decline in price, dropping from $216 to $167 within a day. However, the cryptocurrency has since bounced back by nearly 30% to retest the $216 level, which has been a significant horizontal level in the past month. Despite this recovery, the overall trend for TAO has been bearish since the final week of January when it broke below the $416 level, the previous swing low. The $434-$450 region, which was previously a support level, has now turned into resistance, indicating a challenging road ahead for TAO.
Over the past six weeks, the On-Balance Volume (OBV) indicator for TAO has been steadily declining as prices have dropped from $470 to $180. Recently, the $216 level has also switched from support to resistance, further signaling potential losses in the coming days. While some analysts predict a price move toward $140-$150 in April, there has been a slight uptick in the OBV and a surge in the Chaikin Money Flow (CMF) indicator, indicating increased buying pressure and capital inflows. However, the market structure and momentum continue to be bearish, with TAO trading below its 20-day moving average and facing rising volatility.
Traders looking to position themselves in the market should pay attention to key price levels and liquidity clusters. The 1-month liquidation heatmap shows liquidity at $240 and $220, making these levels potential short-term price targets for TAO. Similarly, the 1-week liquidation heatmap highlights a significant liquidity cluster around $220, suggesting that TAO prices may move higher to reach this level. However, traders should be prepared for a possible bearish reversal once TAO reaches $220, as it is unclear whether the cryptocurrency will continue to climb to $240 or face resistance.
In the event that TAO surpasses $240, traders should exercise caution as it could trigger a price bounce to $280-$300. Until $240 is established as a support level in the short term, traders are advised to maintain a bearish bias. It is essential to consider all possibilities and to stay vigilant in a volatile market environment. This information is not intended as financial advice and is solely the opinion of the writer.
