Bittensor’s [TAO] price action has been pretty interesting lately. Despite appearing in the trending tokens list, TAO fell consistently on the daily charts. In the last 24 hours alone, it lost more than 2% of its value. Its daily volume of $90 million followed a similar trend too.
In fact, the liquidity levels suggested that TAO may be making lower lows, while on the charts the altcoin seemed to be forming a base for a potential reversal. Hence, the question: Can TAO bounce back from $180 as it did before?
TAO joins trending tokens list as volume spikes
According to CoinGecko, TAO made it to the list of the market’s top trending tokens, ranked at position seven. DeXe [DEXE], Pudgy Penguins [PENGU], and Zama Protocol [ZAMA] were some of the other tokens in this list.
This resulted in an increase in chain activity, as evidenced by the real-time transaction volume. The last 200 transactions on the network saw more than 100 TAO tokens traded at a time.
TAO liquidity to shape the next move
That’s not all though as liquidity apparently influenced TAO’s price moves more than its on-chain activity.
Over the last few days, for instance, heavier liquidity was stacked between $220 and $255, while the closest downside cluster was between $185 and $190. Some of the heavier shorts have since been closed, with the concentration now between $195 and $205.
Below the $185-$190 range, the clusters have been losing relevance as larger long liquidations occur and migrate the liquidity lower. At the time of writing, they sat between $168 and $175, with more weight around $160-$165.
This implied that both bears and bulls may have repositioned, with shorts moving closer to the price while longs moved deeper.
As long as TAO remains below $205, the altcoin remains vulnerable to further decline. Losing $185 would expose the price to $168-$175 or the lower target at $160. Otherwise, the altcoin could start clearing the liquidity above the press time price level.
Is a 59% surge possible?
On the 4-hour chart, TAO appeared to be forming a base above the $180-$185 zone. Historical performance revealed that this level held strong in early June and resulted in a 59% upside rally.
However, not everything seemed to be aligned for such a bullish reversal. The Open Interest (OI) has been falling, but it flattened at around $127 million. This hinted at a lack of enough buying power.
A resurgence in the price of Bitcoin [BTC] would benefit TAO. Especially since their correlation coefficient has risen to 0.89. Otherwise, TAO remains more likely to break lower than a bullish rebound.
Final Summary
- Bittensor was among the market’s biggest trending tokens, with real-time transaction volume for TAO spiking.
- TAO’s liquidity levels suggested the altcoin may be more likely to fall.
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