Bittensor Price Soars 65% Following Release of Dynamic TAO Whitepaper

Key Takeaways

• Bittensor released the Dynamic TAO (dTAO) whitepaper.
• The TAO price bounced over 65% on Feb. 3.
• Can TAO hold above the $350 horizontal support?

Bittensor (TAO) was one of the leaders of Artificial Intelligence (AI) tokens in 2023 and 2024, reaching its all-time high of $777 in April 2024 after a 2,700% increase in less than a year.

Despite the ensuing breakdown, TAO regained its footing in the latter half of the year and nearly reached a new all-time high in December.

However, momentum waned, and the price has fallen by over 50% since. Nevertheless, optimism surrounding the Dynamic TAO whitepaper release on Feb. 3 triggered a notable bounce that caused a reclaim of an important support level.

With that in mind, the question is if the TAO price can build on this increase and start another upward movement toward new highs.

Dynamic TAO Whitepaper

On Feb. 3, the Bittensor team released the whitepaper for Dynamic TAO. dTAO is an upgrade to the current chain that changes the previous emission mechanism with a new, market-driven one.

The upgrade will also introduce subnet tokens, through which miners, validators, and subnet owners will earn rewards.

According to the whitepaper , this is a fundamental shift toward market democracy when evaluating subnets since it eliminates centralization. To put it into simple terms, the subnet value will be determined by how much TAO users have staked in their reserves.

Well-known TAO enthusiast Dread Bongo summarized the main benefits of Dynamic TAO:

• Market-driven emissions will minimize validator handouts
• Each subnet will run its economy through its alpha token
• Each subnet can now scale permissionlessly, ensuring more growth.

The TAO price reacted positively to the news, recovering all of its losses from the Feb.3 liquidation event and creating a bullish candlestick above the $350 support.

TAO Bounces at Support

The daily time frame chart shows that TAO broke down from the $350 horizontal support area on Feb. 3 but created a bullish hammer candlestick (white icon) and reclaimed it.

This extremely bullish sign suggests the breakdown was a deviation, and buyers have taken over, pushing the TAO price above support.

Moreover, the low validated the support trend line of a descending parallel channel. These channels usually contain corrective movements, and the bounce took the price above the channel’s midline. This makes a breakout the most likely future scenario.

Technical indicators show bullish signs. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have both generated bullish divergences (green) throughout the entire channel’s duration, making a breakout even more likely.

If one happens, the next closest resistance will be at $550, a critical horizontal and Fibonacci level.

TAO Price Breakout

The wave count gives a positive outlook for TAO. According to the count, TAO completed a five-wave upward movement (white) starting in August 2024. If so, TAO will begin another upward movement and break out from the channel.

If the ensuing upward movement has the same length as the previous one, TAO will reach a high of $843.8. TAO can reach a high of $1,061 in case of an extension, the 1.61 external Fibonacci retracement of the recent drop.

Alternatively, closing below the $350 horizontal support area will invalidate this count. TAO could fall to the channel’s support trend line at $200 in that possibility.

Still Hope Left for TAO

After the Dynamic TAO whitepaper release, the TAO price bounced admirably on Feb. 3. The price created a bullish candlestick and validated two important support levels.

As a result, a breakout from the channel is likely. A successful breakout could trigger a TAO price increase toward $843 and possibly $1,061.