Bittensor (TAO) Token Surges 106% in Seven Days, But Can the Rally Sustain?
In the past week, the price of Bittensor (TAO) has experienced a significant surge, with the token rallying by an impressive 106%. This surge can be attributed to major advancements in the decentralized AI protocol, which have greatly contributed to the token’s gains.
One of the key factors driving the bullish case for TAO is the introduction of smart contracts by the Opentensor Foundation on September 15. This move has expanded the utility of TAO within the ecosystem, leading to increased investor enthusiasm and pushing up the token’s price.
Furthermore, the listing of TAO on OKX’s perpetual futures market has provided the token with enhanced exposure and liquidity. With leverage options of up to 50x, this listing has the potential to attract both retail and institutional traders, further driving the price of TAO.
The positive remarks made by Vice President Kamala Harris regarding AI and digital assets have also had a significant impact on TAO’s price action. Harris’s focus on fostering innovation while ensuring consumer protection resonates with the crypto market, creating a sense of optimism and contributing to the token’s gains.
Despite these positive developments, it is crucial to acknowledge the possibility of a short-term correction. The sharp increase in TAO’s price could lead to profit-taking among traders, particularly given the volatile nature of the crypto market. Additionally, regulatory changes and macroeconomic conditions may influence the future movement of TAO’s price.
Looking at the technical analysis, the overbought RSI on the TAO chart indicates a potential price reversal. With an RSI above 70 and reaching above 80, the risk of a near-term correction is heightened. This overbought condition suggests that upward momentum may be overextended, leading to profit-taking and a possible pullback or consolidation.
If the TAO price does experience a drop, the next support level to watch for is around the $454 mark. Failure to hold this support level could result in the token testing the support near $378 before finding a recovery.
On the other hand, if the rally continues, the TAO price may encounter resistance near the $611 and $754 levels.
In conclusion, while the recent performance of Bittensor (TAO) has been impressive, investors should exercise caution due to the potential for a short-term correction. It is important to closely monitor the RSI and be aware of the support and resistance levels that may come into play.