Bittensor (TAO) has flipped its year-long descending trendline on its daily chart into a support level. With TAO crossing above this descending trendline, there have been quite a few bullish incidents, but sustenance above this level looks very dodgy.
TAO reaches $344, breaking a 1-year downtrend
Gaining about 10% in the last 24 hours and rising to $344, TAO flipped the descending trendline that had been hindering its growth for at least a year.
Since the beginning of 2025, TAO has been trading below this trendline, despite testing it multiple times. However, there was one occasion—back in September—when TAO crossed above this level and reached price levels above $500.
But the October 10, 2025, liquidations, once again, dragged the prices back below this trendline. However, now that TAO has crossed above this pivotal level, it needs to establish its ground above this level.
TAO establishes bull rally rising above 200 and 50-day MA
One thing to note about this breakthrough is that, when TAO flipped this level, not only did it end the year-long downtrend, but it also crossed above the 200-day moving average and 50-day moving average.
These two indicators are important because traders use them as long-term and short-term levels to set their positions. TAO crossing above both these indicators resembles that the bullish momentum has taken over in the short and long term.
Can TAO sustain the newly conquered grounds?
But the question is, will TAO be able to form a solid foundation above this level? Technically, it won’t be able to do that. According to the relative strength index indicator, the market is overbought and the TAO is overvalued. As such, prices will naturally decline as a result.
But pullbacks are part of a healthy market, as they drop weak hands and give TAO a fresh start. So it is important that, during the phase of retracement, TAO keeps this newly established bullish trend intact.
If TAO is to retrace safely while holding its uptrend intact, the lowest it can fall to is $295, as shown in the chart above (green dotted line). If TAO crashed below this level, it won’t be considered a pullback but a trend change. However, there is an exception to the above thesis.
For instance, if TAO crashes below $295, the thesis is that it has lost the bullish trend, correct? However, the next support level is $264, which is below $295 and has produced spikes that have taken TAO over $400.
As such, a crash below $295 cannot always be written as a trend change. It will be interesting to see how far TAO retraces in the coming days.
