The TAO price pumped 17% this week and is now trading around $432. However, crypto veteran Ali Martinez just posted a worrying chart to his 127k followers on Twitter.
Ali Martinez recently shared a troubling technical analysis chart with his 127k followers on X. The chart suggests that the Bittensor (TAO) price could be headed for a 49% meltdown. Let's examine the chart to understand Martinez's analysis and identify potential price levels for TAO.
Despite a 17% gain this week, pushing the price to around $432, TAO's broader price trend appears bearish. The technical analysis chart shows a series of lower highs since TAO's peak in the $700-$800 range. These lower highs, coupled with lower lows, have driven the price down to the $200s. Notably, even with the recent bounce, the main downtrend remains intact.
The chart highlights several key price zones. At the upper end, we have the $700-$767 area, where TAO encountered strong resistance during its initial surge. Below that, the $680-$700 zone has also been crucial, with multiple price rejections. Finally, the $550-$560 range has acted as a ceiling, preventing TAO from advancing further.
If the current support at $400-$450 fails to hold, we could see the price drop to $350 initially and then potentially all the way to the $220 level mentioned by Martinez. This lower boundary of the descending channel is where TAO could find significant support or continue its slide.
The recent price surge might seem promising, but it could also be a "relief rally" within a larger downtrend. Unless TAO can break above $550 and then push through $680, which would be a remarkable feat, this downtrend is likely to continue. In fact, if the price continues to follow this pattern, the 49% drop to $220 that Martinez is warning about could materialize.
It's important to note that even in strong downtrends, we can observe short-term bounces like the one TAO has experienced. However, these rallies don't necessarily indicate the end of the larger bearish trend. In this case, the chart structure suggests caution, especially with these strong resistance levels overhead.
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