Bittensor's TAO price may plunge 40% within five weeks: Fractal data

TAO's price has rallied 160% in over a month, but is printing a familiar golden cross that has preceded massive price corrections in the past.

The latest 160% rally in Bittensor (TAO) shows signs of exhaustion as it forms a golden-cross pattern on the chart that previously preceded steep corrections.

TAO prints a golden cross that has preceded 40% drawdown on average in the past.

Social volume for Bittensor is high, but retail euphoria remains muted.

As of Thursday, March 26, TAO’s 20-day exponential moving average (20-day EMA, the green line) was crossing above its 200-day exponential moving average (200-day EMA, the blue wave).

Traders typically view a short-term average moving above a long-term one as a bullish signal. In TAO’s case, however, the pattern has often appeared near local tops, sometimes triggering brief upside follow-through before reversing sharply.

In the last three similar crossovers, TAO dropped by roughly 38.50%, 32.50%, and 45.50% within five-six weeks. That amounts to an average drawdown of about 40%, raising Bittensor’s odds of falling to $200 by early May if the pattern repeats.

TAO’s downside risk is rising further as its relative strength index (RSI) has stayed above the 70 overbought threshold for weeks. The reading suggests the recent rally may have gone too far, too fast, raising the risk of profit-taking or a short-term cooldown.

Broader macro conditions add to the bearish case, as the escalating US–Iran war lifts oil prices, fuels inflation risks, and weakens the case for near-term Federal Reserve easing.

TAO’s rally has triggered a sharp increase in online discussion without the kind of euphoric sentiment that typically marks local tops, according to data resource Santiment.

Social volume across X, Reddit, Telegram, and other platforms has climbed to its second-highest level in six months, trailing only the frenzy seen near TAO’s $529 peak in November.

At the same time, sentiment remains relatively subdued, with only 1.5 positive comments for every negative one.

“This is generally a good sign that the rally can continue, with little interference from greedy traders that typically signal forming tops,” Santiment said.

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Still, TAO’s golden cross fractal suggests that even rallies driven by improving sentiment can turn into bull traps.

In the last three similar golden-cross setups, TAO still rallied by roughly 15.6%, 5.7%, and 42.6% before reversing lower.

That puts the average post-cross upside at around 21.30%, hinting at a short-term Bittensor price rally toward $420 or higher before exhaustion sets in.

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Source: CoinTelegraph