Bittensor Price Forecast: TAO’s pullback extends 20% from the monthly peak

Bittensor steadies at support as derivatives recover

The Bittensor derivatives market has stabilized, with Open Interest (OI), reflecting the notional value of outstanding futures and options contracts, rising to $416 million on Tuesday, from $402 million the previous day.

CoinGlass data shows that OI surged to $555 million last Wednesday, aligning with the TAO’s March peak of $378. Therefore, a steady increase would reinforce investor confidence in the AI crypto token and increase the chances of a sustained recovery.

Bittensor Futures OI | Source: CoinGlass

Meanwhile, traders are increasingly piling into long positions, with TAO’s futures OI weighted funding rate holding at 0.0074% in the positive territory. Traders lean into risk when sentiment surrounding the underlying asset improves. Despite the pullback from the $378 high to $300 support, interest in Bittensor appears intact, suggesting a potential recovery in the short- to medium-term.

Bittensor OI Weighted Funding Rate | Source: CoinGlass

Technical outlook: Bittensor holds key support

Bittensor is trading under pressure as sellers regain control following the rejection from the highs of $378. Its near-term bias remains neutral-to-bearish after the token broke above the long-running descending resistance trend line around $274, shifting that line into a backdrop of former supply turned into support.

The price holds above the clustered 50-day, 100-day and 200-day Exponential Moving Averages (EMAs) between roughly $250 and $274, indicating the broader trend has rotated upward despite the recent pullback from its March peak.

Still, the Moving Average Convergence Divergence (MACD) indicator has slipped below its signal line as red histogram bars expand on the daily chart, showing fading upside momentum rather than outright trend reversal, while the Relative Strength Index (RSI) at 60 eases from overbought territory yet remains above 50, consistent with a corrective pause within an emerging uptrend.

Bittensor's initial support is seen at $300, followed by the 200-day EMA at $274 and the demand zone around $250, where a deeper retracement would be expected to attract dip buyers if the bullish bias is to remain intact.

On the upside, immediate resistance lies at the recent high near $316 – a break here would open the way toward $337 and then the $378 swing high. A daily close above $378 would confirm a continuation of the bullish leg, while a sustained drop back below $274 would undermine the current upward bias.

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rates affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

(The technical analysis of this story was written with the help of an AI tool.)