Bittensor (TAO) signals a recovery amid weakening retail demand

Bittensor – one of the prominent AI tokens on the market – is trading around $190 as of Thursday. The steady upward trend is also spreading across the cryptocurrency market, with Bitcoin holding firmly above $71,000 and Ethereum maintaining stability above $2,000.

Bittensor Gains in Value Amid Low Retail Investor Participation

Bittensor’s derivatives market continues to weaken as open interest (OI) in futures contracts decreased to $132 million on Thursday, down from $138 million the previous day. The growth momentum appears to be stalling, especially after OI reached $176 million in February but failed to sustain the expansion.

Data from CoinGlass shows that OI hit a record high of $418 million in November, coinciding with TAO’s price surge to $539. However, if retail investors continue to stay on the sidelines—reflecting caution and lack of confidence among traders in this AI token—the current recovery could lose momentum and increase the risk of a price correction.

Bittensor Open Interest (OI) | Source: CoinGlass Nevertheless, the picture is not entirely negative. Despite the decline in OI, traders are showing signs of increased participation in TAO’s derivatives products. This is evidenced by the funding rate, which stood at 0.0057% on Thursday, up from 0.0048% the day before. If this indicator continues to trend upward, it could become a key support factor for the price recovery, as short-term confidence in Bittensor’s prospects gradually strengthens.

Bittensor Funding Rate | Source: CoinGlass

Technical Outlook: Bittensor Tests Short-Term Recovery Strength

On the 4-hour chart, Bittensor is gradually breaking above the 50, 100, and 200-period exponential moving averages (EMA), currently clustered between $181 and $189. The 200-period EMA acts as the nearest support zone, providing a foundation for the bulls to sustain the recovery momentum and aim for the psychological $200 level.

Notably, the 50-period EMA is trending upward and crossing above the 100-period EMA, which could form a short-term Golden Cross—a signal often interpreted as a sign that the bullish trend is gaining dominance.

TAO/USDT 4-hour Chart | Source: TradingView

In terms of momentum, the MACD indicator remains above its signal line, with green histogram bars continuing to expand. This reflects increasing buying pressure, supporting the short-term bullish outlook.

Meanwhile, the RSI indicator is oscillating around 63 and trending toward overbought territory. If this continues upward, the price rally is likely to be further reinforced.

Regarding key technical levels, the nearest support is identified around $189, where the 200-day EMA intersects with the 50% Fibonacci level. If the price closes below this short-term demand zone, Bittensor could retrace to the 61.8% Fibonacci level before testing the convergence of the 50 and 100 EMAs near $181.