Bittensor’s TAO token may be on the verge of a major breakout after showing its first real signs of strength following a prolonged downtrend. Although the setup is promising, one critical confirmation remains before a full 200% rally toward the previous range highs becomes a realistic target.
Breaking Out of the Bearish Market Structure
For several weeks, TAO has been trapped in a persistent downtrend, marked by consistent lower highs and lower lows. However, the recent price action shows a potential shift.
An impulsive rally broke through a major lower high a key event that signals a possible end to the bearish structure. This is the first time since the range highs that TAO has shown a credible technical reversal.
Now, the price is hovering near a critical confluence zone, and the next move could be decisive.
Key Technical Factors to Watch
- TAO Breaks Bearish Structure: The break above the recent lower high suggests a trend reversal is potentially underway.\n- Testing Crucial Fibonacci and VWAP Levels: TAO is currently testing the 0.618 Fibonacci retracement level combined with the anchored VWAP from the top of the downtrend. This overlap forms a highly significant technical zone.\n- Point of Control (POC) Importance: Price is sitting near the POC the area of the highest traded volume providing another critical layer of support.\n\nThis confluence between the 0.618 Fibonacci level, VWAP, and POC creates a high-probability area for a potential bullish higher low formation.
The Bigger Picture: Macro Structure and Range
Zooming out, TAO is still trading within a wide sideways range. However, the recent impulsive move and strong bounce from the range lows indicate renewed buyer interest at lower levels.
If TAO can confirm a higher low at the current confluence zone, the chances of a bullish breakout and a full range rotation back to previous highs will sharply increase.
What’s Next for TAO?
TAO is now at a critical inflection point. Traders and investors should watch closely to see if the price consolidates and forms a valid higher low around the current zone.
A confirmed higher low, paired with volume profile support, could spark a powerful bullish continuation setting the stage for a possible 200% rally from today’s levels.
Failure to hold the key support zone, however, could invalidate the bullish setup and return TAO to a consolidation phase or even further downside exploration.
