Bittensor’s [$TAO] price action has been pretty interesting lately. Despite appearing in the trending tokens list, $TAO fell consistently on the daily charts. In the last 24 hours alone, it lost more than 2% of its value. Its daily volume of $90 million followed a similar trend too.
In fact, the liquidity levels suggested that $TAO may be making lower lows, while on the charts the altcoin seemed to be forming a base for a potential reversal. Hence, the question: Can $TAO bounce back from $180 as it did before?
$TAO joins trending tokens list as volume spikes
According to CoinGecko, $TAO made it to the list of the market’s top trending tokens, ranked at position seven. DeXe [DEXE], Pudgy Penguins [PENGU], and Zama Protocol [ZAMA] were some of the other tokens in this list.
This resulted in an increase in chain activity, as evidenced by the real-time transaction volume. The last 200 transactions on the network saw more than 100 $TAO tokens traded at a time.
$TAO liquidity to shape the next move
That’s not all though as liquidity apparently influenced $TAO’s price moves more than its on-chain activity.
Over the last few days, for instance, heavier liquidity was stacked between $220 and $255, while the closest downside cluster was between $185 and $190. Some of the heavier shorts have since been closed, with the concentration now between $195 and $205.
Below the $185-$190 range, the clusters have been losing relevance as larger long liquidations occur and migrate the liquidity lower. At the time of writing, they sat between $168 and $175, with more weight around $160-$165.
This implied that both bears and bulls may have repositioned, with shorts moving closer to the price while longs moved deeper.
As long as $TAO remains below $205, the altcoin remains vulnerable to further decline. Losing $185 would expose the price to $168-$175 or the lower target at $160. Otherwise, the altcoin could start clearing the liquidity above the press time price level.
Is a 59% surge possible?
On the 4-hour chart, $TAO appeared to be forming a base above the $180-$185 zone. Historical performance revealed that this level held strong in early June and resulted in a 59% upside rally.
However, not everything seemed to be aligned for such a bullish reversal. The Open Interest (OI) has been falling, but it flattened at around $127 million. This hinted at a lack of enough buying power.
A resurgence in the price of Bitcoin [BTC] would benefit $TAO. Especially since their correlation coefficient has risen to 0.89. Otherwise, $TAO remains more likely to break lower than a bullish rebound.
Final Summary
- Bittensor was among the market’s biggest trending tokens, with real-time transaction volume for $TAO spiking.
- $TAO’s liquidity levels suggested the altcoin may be more likely to fall.