Bittensor Experiences 5-Day Bearish Trend – Can the TAO Support Zone Hold?

Bittensor TAO

Bittensor's TAO token has been on a bearish trend for five consecutive days, driven by increased selling activity. The downturn follows an unsuccessful attempt to retest the $310 supply zone on January 10, leading to persistent short selling in the market. This zone has previously capped recovery efforts and remains crucial for near-term price direction. For a rebound to gain traction, buyers will need to decisively overcome this level.

As of now, TAO is trading around $251, reflecting a sharp daily decline and marking its lowest price since being listed on Coinbase in late October. This downward movement indicates decreasing buying momentum. Previous attempts to stabilize the price have not attracted significant buying interest, allowing sellers to maintain control and push prices lower across the daily charts.

TAO price analysis Source: TradingView

Key Insights into the Supply Zone Retest

The recent interaction with the $310 price region has positioned Bittensor TAO in a critical technical territory. Additionally, the price approached this zone while forming successive lower highs, indicating ongoing distribution rather than mere short-term volatility. This retest occurred without a corresponding rise in bullish activity, keeping the risks of further declines a top priority. This weakness has rendered the price susceptible as the overall market structure leans downward.

Network Metrics Indicate Decreased Engagement

Beyond the price dynamics, key network metrics have shown a notable decline during the market downturn. Development activity for TAO has fallen to its lowest level, indicating a slowdown in ecosystem momentum. Typically, extended downtrends coincide with diminished investor interest, particularly when development activity wanes.

TAO development activity Source: Santiment

Furthermore, social engagement metrics have also declined alongside the price. Data from Santiment indicates that TAO garnered approximately 30 social mentions in the last 24 hours, reflecting a diminishing level of speculative interest. This drop in social volume mirrors an overall decrease in demand and lower participation from retail investors.

TAO social mentions Source: Santiment

Cautious Market Sentiment Surrounds TAO

In summary, the combination of declining prices, weakened development activity, and reduced social engagement has left market sentiment on edge. On-chain indicators suggest that traders are hesitant to make aggressive moves at current price levels, resulting in a fragile bullish conviction. With TAO trading below the $310 supply zone and engagement metrics showing weakness, selling pressure appears to be the prevailing trend.

Conclusion

Bittensor's performance in the coming days will be closely watched as traders hope for signs of stabilization. The pressure remains high as interest appears to be waning, and overcoming the critical $310 level will be essential for any potential reversal in direction.