Bittensor (TAO) Crashes 27% After Covenant AI Exit Sparks

By Tina Fatima | Edited By Ammar Raza,April 10, 2026, 9:58 PM

Bittensor (TAO) has plunged sharply, dropping 27% within 12 hours on April 10, 2026, and erasing nearly $900 million from its market capitalization.

The sudden decline triggered heavy liquidations across the market, with around $9 million in TAO long positions wiped out as selling pressure intensified.

The sell-off followed a major development involving Covenant AI, a key project within the ecosystem, which announced its exit from Bittensor. Reports indicate the team sold approximately 37,000 TAO, valued at over $10 million.

In a strong statement, the team accused the project’s founder of operating a “decentralized theatre” while allegedly maintaining centralized control over critical aspects of the protocol.

Also Read: Bittensor TAO Rises 7% as Market Eyes Channel Breakout Toward $700

Technical Breakdown Signals Rising Volatility

From a technical perspective, the TAO daily chart shows a clear shift from bullish momentum to a sharp corrective phase.

Price dropped sharply, closing near $267 after rejection around $310–$320, breaking short-term structure and signaling increasing selling pressure across the market.

Bollinger Bands indicate rising volatility as the price falls below the mid-band near $310 and approaches the lower band around $269.

This breakdown suggests strong bearish momentum. Continued movement below this level could trigger extended downside expansion in the near term.

Ichimoku analysis shows price is moving below Tenkan-sen and Kijun-sen to form resistance at $299-$304.

The TAO is inching closer towards the cloud, which shows that there’s some confusion in the market. If the price moves below $267, it may fall to $235.

Momentum Indicators Point to Continued Weakness

Momentum indicators further support the bearish outlook. The RSI (14) is currently hovering around 42.41, indicating weakening momentum and an approach to the lower neutral zone.

Previously, the RSI level was around 60.94, indicating increased bullish energy. This trend could be a sign of increasing selling power, but the market is not oversold below 30 yet.

MACD is pointing towards the bearish side: The MACD line value is 12.61, while that of the signal line is 19.41. Moreover, the value of the histogram is negative at – 6.80. This shows that the momentum on the downward side is increasing.

This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.

Also Read: Bittensor TAO Rises 7% as Market Eyes Channel Breakout Toward $700