Growth of AI Sector to $14.4B: Will Bittensor's TAO Bounce Back to $165?

The AI cryptocurrency sector has shown a promising increase over the last month. According to CoinMarketCap, this sector's overall market capitalization rose from $12.76 billion to $14.42 billion in just 30 days. Notably, this growth peaked in mid-February when TAO surged nearly 50% in five days, though it couldn’t maintain that upward momentum.

Key Takeaways

The AI cryptocurrency sector's market cap increased from $12.76 billion to $14.42 billion in the last month.
TAO spiked nearly 50% in February but struggled to hold those gains.
Current market data shows a bearish trend for TAO with decreased demand signals.
TAO is trading within a range of $165 to $200, with traders advised to take advantage of this range.
Caution is advised as the longer-term outlook for TAO appears negative.

Disclaimer: The information provided does not constitute financial, investment, trading, or any other form of advice and reflects solely the opinion of the writer.

Bittensor rally halted below $200 as sellers take control yet again

TAO Traders Brace for Potential Losses

TAO Coinalyze

Source: Coinalyze

Recent data from Coinalyze indicates a 6% rise in Open Interest within the past 24 hours. Most of this increase occurred when Bittensor [TAO] climbed toward $200 on March 7. However, this rally lacked robust support from ongoing demand.

In the past week, the Spot Cumulative Volume Delta (CVD) has shown a decline, and the Funding Rate has primarily remained negative throughout March. This suggests a weak demand and an overall bearish sentiment in the short-term market.

TAO 4-hour Chart

Source: TAO/USDT on TradingView

Compounding the short-term bearish outlook, TAO has been trading within a defined range since mid-February, fluctuating between $165 and $200. As of now, the momentum is downward, with the On-Balance Volume (OBV) falling below a local support level, signaling increased selling pressure. Coupled with Bitcoin [BTC] dipping back below $70k, it is anticipated that TAO could be heading toward the lower boundary of the $165 range.

Traders' Strategy - Capitalizing on the Range

TAO Liquidation Heatmap

Source: CoinGlass

The liquidation heatmap over the past month points out the extremes of the trading range, marking $160 and $200 as key levels for traders to consider buying and selling, respectively. While the longer-term trend for TAO remains bearish, traders may find opportunities to leverage these price ranges until a breakout occurs.