Can TAO Sustain Momentum Amid Looming Token Unlocks?

Bittensor's native token, TAO, has surged 23% from a key support level, breaking out of a two-week consolidation pattern and eyeing a potential rally toward $470. The price action, driven by rising trading volume and bullish technical indicators, has reignited optimism among traders. Over the past 24 hours, TAO's trading volume spiked 89.34% to $286.66 million, validating the strength of the upward move . This surge follows a period of sideways trading between $220 and $340, with the recent breakout above the $276 resistance level marking a critical turning point .

Technical analysis highlights the significance of the $260–$280 support zone. Analysts emphasize that holding this range is crucial for confirming the bullish trend. The Relative Strength Index (RSI) nearing overbought territory and a bullish MACD crossover further reinforce the momentum . Additionally, the Awesome Oscillator (AO) remains in positive territory, indicating sustained upward pressure within an ascending channel . These indicators suggest that institutional buyers or high-conviction traders are driving the rally, as evidenced by the sharp volume increase and classic bullish candlestick patterns .

The immediate target for TAO is the $470 level, a former resistance zone from early 2024. If bulls maintain control, the token could retest this area, which historically acted as a supply zone for profit-taking. A successful retest would require sustained volume and a failure to retreat into the previous consolidation range . The 4-hour chart analysis also points to a potential short-term target of $389.47, with a longer-term extension toward $461.04 if buying pressure persists . However, a breakdown below $310.57 could trigger a retracement to $256.19, capping near-term gains .

Market fundamentals also support the bullish case. TAO's market capitalization has risen 8.08% to $2.73 billion, while its fully diluted valuation (FDV) stands at $6.69 billion. The low float compared to other large-cap assets increases volatility during aggressive price moves, a trait observed in the current surge . Token unlock reports add context, noting that TAO will release $427 million in tokens in October 2025, part of a broader $13 billion unlock wave across AI, meme, and Layer 2 sectors . While this could introduce selling pressure, the immediate technical outlook remains favorable.

Risks persist, particularly if TAO fails to hold the $260–$280 support. A breakdown could signal a return to range-bound trading or a deeper correction. Analysts caution that the $470 target hinges on maintaining momentum and volume, with past corrections serving as a cautionary example . Conversely, a sustained move above $340 could attract further institutional interest, amplifying the upward trajectory.

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