The price of Bittensor (TAO), a leading AI-related token, has been trading within an ascending channel since early September. Currently priced at $575, the altcoin has seen a 150% increase during this period.
However, with buying pressure weakening, TAO may be at risk of losing some of these gains. Here’s what token holders should watch for.
Bittensor Could Lose Bullish Support
Bittensor’s price has followed an ascending channel, a pattern where the asset consistently makes higher highs and higher lows, indicating an uptrend. The upper boundary of the channel acts as resistance, while the lower boundary serves as support, attracting increased buying interest.
At present, Bittensor is hovering near the lower support line of this channel at $558.80, reflecting reduced demand for the altcoin.
Bittensor Ascending Channel. Source: TradingViewWhen an asset trades near this lower line, it means the price is close to the channel’s support level. At this point, buyers often step in to push the price back up, making it a potential entry point for traders.However, if the asset fails to hold above this lower line and breaks below the channel, it signals a weakening uptrend or the start of a bearish reversal.BeinCrypto’s assessment of TAO’s key indicators reveals that this might be true for the altcoin. For example, its Chaikin Money Flow (CMF) is on a downward trend, below the zero line at -0.21.
Bittensor CMF. Source: TradingView
The Chaikin Money Flow (CMF) indicator measures the strength of money flow into or out of an asset over a specific time frame. A negative CMF reading indicates that selling activity is outpacing buying activity, suggesting that more traders are offloading the asset than acquiring it. Traders often interpret this as a sign that a downtrend may continue.
Additionally, TAO’s declining on-balance volume (OBV) reinforces this bearish outlook. Currently at 41,254, the OBV has dropped 97% over the past 21 days.
OBV tracks buying and selling pressure based on trading volume. A declining OBV means selling volume is outweighing buying volume, indicating that sellers are more active than buyers, which typically leads to downward momentum in price.
Bittensor OBV. Source: TradingView
TAO Price Prediction: Two Possible Outcomes for the Altcoin
If the current selling pressure persists, Bittensor’s price could decline toward the critical support level of $558.80. Without renewed buying interest, the bulls may struggle to maintain this level, which could result in a drop to $219.60. If this support fails, TAO might retreat further to its August 5 low of $163.70.
Bittensor Price Analysis. Source: TradingView
If new demand enters the market, Bittensor’s price could bounce off the lower boundary of the ascending channel and attempt to break through the resistance at $736. A successful breakout above this level may drive the altcoin toward $1,249, indicating a potential bullish reversal.