Key Takeaways
Bittensor (TAO) has recently rebounded from a key support level and is now testing a descending trendline resistance.
The price structure follows an Elliott Wave count, indicating that a potential bullish breakout could be underway.
Fibonacci retracement and extension levels highlight key areas for the next major move.
The daily chart for TAO illustrates a broad Elliott Wave cycle, with the asset currently within a corrective wave (4).
After reaching a peak near the all-time high of $754 on Dec. 6, the price retraced significantly, finding support around $365, aligning with the 0.5 Fibonacci retracement.
The recent price action formed a descending wedge, typically a bullish reversal pattern. The Relative Strength Index (RSI) has rebounded from oversold conditions, suggesting that bearish exhaustion is in play.
However, the price remains below the key resistance level at $587 (0.236 Fibonacci retracement), which needs to be broken for further upside confirmation.
The structure indicates that TAO may be completing wave (iv) of a larger five-wave impulse. If this scenario holds, the next upward movement could mark the beginning of wave (v), targeting Fibonacci extensions above $650.
However, a failure to hold above the $400-$399 support zone could signal a deeper corrective phase, invalidating the bullish outlook.
The 1-hour chart shows a more detailed Elliott Wave count, suggesting that a lower-degree five-wave impulse is in progress. Wave (i) has broken through local resistance, while wave (ii) recently found support near the 0.5 retracement level at $400.
The price is now challenging the descending trendline, and a confirmed breakout above $500 would signal further bullish momentum.
Fibonacci extension projections place the next targets for wave (iii) at $565 (1.618 Fibonacci extension) and $605 (2.0 Fibonacci extension).
If momentum sustains, wave (v) could extend as high as $671 or even $754, aligning with historical resistance levels.
On the downside, this bullish setup would be invalidated if TAO falls below the recent low of $399.
In that case, the price could revisit the 0.618 retracement level at $316 before finding stronger support.
Momentum indicators suggest increasing buying strength, but RSI is approaching overbought levels, meaning some consolidation may occur before further upside.
A confirmed break above $500-$520 would likely ignite the next wave of bullish price action.
TAO is at a pivotal moment. A breakout above $500 will likely confirm the next bullish wave, while failure to hold $399 could trigger a deeper correction.