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Bittensor Pulls Back From Record High — Is TAO Preparing for a New Surge?

Last Updated November 22, 2023 11:12 AM
Nikola Lazic
Last Updated November 22, 2023 11:12 AM

Key Takeaways

  • TAO price has made a decline of 26% since its all-time high.
  • Previously, it was in an uptrend of 560%, lasting a month.
  • More confirmations are needed, but a correction might have started.

Bittensor’s native token TAO has been on the surge since October 19, when it was trading at $45. It made a staggering increase of 561%, measured to its all-time high of $302 on Monday, November 20. 

Since then, a sharp decline of 26.5% has been made to $225, not seen in this previous rising period. It recovered slightly and is now being traded at around $250, but considering the increase in one month, this could signal the bullish momentum diminishing. 

Overall, the price is still on an upward trajectory, so will we see a reversal, or is this just a minor pullback before the surge continues?  

TAO Price Analysis 

In our previous analysis of the TAO token, we have been calling for an overextension and a possible pullback. We’ve stated: “Considering the likelihood of being in wave 3 within the five-wave impulse, a retracement in wave 4 is anticipated to commence soon.”

A correction in the making?
Price likely ended its rise from October 20

This conclusion was drawn from several factors, out of which the most crucial ones were the daily chart RSI reaching 88% and being in the overbought zone since October and the wave structure implying the end of the five-wave impulse for its higher degree wave 3. 

We are still maintaining this outlook moving forward, and in December, we will likely see more tumbling for TAO. If this is the start of wave 4 from its highest degree count, it should be a shallow correction that will consolidate the price.  

It could also form a triangle structure with an ABCDE correction, but as it already did so on its wave 2, according to the Elliott Wave rune of alternating correction, the channel is more likely to develop. 

Zooming into the hourly chart, we can see that the price remained above its previous low before the bounce to the $250 area. This means that the price drop is still early in its development, and to confirm the larger wave 4 and a prolonged correction, we need to see the first lower high and the first lower low. 

More confirmations needed
Drop seen but still on a higher low

Since the price is rising, the increase could continue for another high. This is why we need to see if the encountered resistance is strong enough and if the buyers exhausted their purchasing power after pushing the price for a 560% increase. 

But in the grand scheme of things, even if it were to proceed to form a corrective wave 4, that would only mean that another wave 5 would follow with a new all-time high ahead but in a more sustainable manner. 

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

 

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