TAO Bulls Charge, But Resistance Looms

TAO, the native token of Bittensor, has shown bullish signs in the ongoing market recovery, with a recent breakout from a strong descending trendline. This breakout suggests a potential shift from a prolonged bearish trend to a bullish phase. However, TAO is currently facing mild resistance from the 200 Exponential Moving Average (EMA) and the horizontal level at the $475 mark.

If TAO breaches this hurdle and closes a daily candle above the $490 level, it could potentially surge by 46% to reach the $720 level in the future. However, the asset's Average Directional Index (ADX) currently stands at 21 and appears to be declining, indicating a lack of strong momentum, which may make it difficult for the asset to sustain its rally.

Despite the bullish price movements, long-term holders have been offloading the asset, as revealed by on-chain analytics. Data from spot inflow/outflow shows that exchanges have witnessed an inflow of $4.52 million worth of TAO tokens during the recent upside momentum, indicating a potential sell-off. Such inflows into exchanges can create selling pressure and lead to a price drop. However, the sentiment and market structure are different in this case, which could pose a challenge for the asset to rally in the coming days.

On the other hand, TAO's Open Interest (OI) has soared by 27% in the past 24 hours, indicating traders' strong interest and confidence in the asset. At press time, the over-leveraged level is $435.9 on the lower side where bulls have held $7.71 million worth of long positions, while $473 on the upper side, where bears have held $5.05 million worth of short positions. This liquidation level clearly defines that the bull is the one who is currently dominating the asset.