Bittensor Experiences 60% Drop from All-Time High: Is This a High-Risk Play or a Chance to Invest?

Bittensor (TAO) has seen a significant price decline of nearly 60% from its all-time high (ATH). Currently hovering around a crucial support level of $300, investors are weighing options for entering the market amidst ongoing selling pressure. Despite the recent downturn, technical indicators suggest potential buying opportunities; however, caution remains as the overall market sentiment and developer activity impact future price movements.

Key Takeaways

TAO is nearing a critical technical and psychological support at $300, a level it has held since June.
The retracement provides a low-risk, high-reward opportunity for long-term investors, with key invalidation levels at $288 and $275.
Over the last week, TAO dropped 14.8%, outpacing Bitcoin's decline of 13.05%.
Price volatility has been significant, with TAO trading between $294 and $470 since June, before recently peaking at $539.
A continued drop from its ATH raises concerns, especially as core developer numbers have decreased.

Bittensor retraces 60% from ATH: High-risk entry or catching a falling knife?

Can TAO Bulls Protect the Low End of the Range?

TAO 1-day Chart Source: TAO/USDT on TradingView

From a technical standpoint, Bittensor (TAO) appears to represent a promising buying opportunity as it returns to a solid demand zone around $300. This price point has been resilient since June.

During the recent price correction from the peak at $539, trading volume has noticeably decreased. This suggests that while sellers dominate the market, there is a possibility for bulls and bears to find balance at the current range lows. After a short period of consolidation, there may be an attempt at a price rally.

For this scenario to unfold, demand needs to pick up, and a rebound in Bitcoin’s price could shift sentiment positively across the altcoin market.

TAO Liquidation Heatmap Source: CoinGlass

The liquidation heatmap indicates that a significant liquidity cluster is positioned between $291 and $302. The lack of built-up liquidity under this range suggests that a substantial move below the range lows before a potential bounce is unlikely.

Thus, bullish swing traders should consider the $275 level as critical support. The $288 to $302 price range serves as a key demand zone, while potential price targets to aim for are $383 and $471, representing the mid-range and range high resistance levels.

Disclaimer: The insights provided herein do not constitute financial, investment, trading, or any form of advice and reflect only the author's personal opinion.