Bittensor drops 39% – But why TAO could be a buying opportunity

The AI sector saw sizeable growth earlier in late March and early April. In the first half of this month, the market cap of the sector rose from a low of $16.24 billion to a peak of $19.12 billion. This represented a 17.7% increase. Bittensor [TAO] is the largest AI token by market cap, and also witnessed strong gains earlier this month. However, like the rest of the AI tokens, TAO has faced a slump over the past week. AMBCrypto closely examined whether this TAO price drop was a retracement or the start of another downtrend. The higher timeframe range formation On the 1-week chart, Bittensor lacked a clear direction. It saw sizeable losses early in 2025, but has traded within a range from $163 to $493 since then. The market crash in the first week of February did see a weekly session close below $167.8 (green), the previous weekly swing low. This was followed by a bounce toward $360. Therefore, instead of a clear structure break, it was more like a liquidity sweep and a bullish reversal. Within this context, the range formation has been defended. The mid-range resistance around $330 has not yet been overcome, and TAO was in a retracement phase. TAO traders can wait for a deeper price dip before buying Now that the higher timeframe context of range formation and bullish bias from the range lows has been established, the 1-day structure can be examined closely. The 1-day swing structure was bullish. The altcoin has already reacted positively to the range lows. Despite the losses recently, traders can maintain a bullish bias. The Fibonacci retracement levels based on the bullish impulse move from just below the range lows meant that $233 and $194 were the next support levels to watch. TAO bulls can likely make a resurgence from this golden pocket. The OBV has made new lows despite the bounce from the range lows. This, combined with the threat of a Bitcoin [BTC] retracement, was a concern for would-be TAO buyers. A price drop below $143 would be invalidation of the buying idea laid out here, as it would break the structure bearishly. Final Summary The weekly TAO price action showed a swing failure pattern that resulted in a rally toward $360. The current retracement can extend toward $200 before the bulls can stop the price losses.