TL;DR:
The Bittensor ecosystem is facing one of the deepest crises of confidence in its history following the abrupt departure of Covenant AI. A key developer has left the network after accusing co-founder Jacob Steeves of excessive centralization.
Following the split, the consequences were immediate. The founder of Covenant liquidated a position of 37,000 Bittensor units, triggering a sell-off cascade. Currently, the asset is trading near $249, accumulating a 68% drop from its all-time high.
Technical indicators currently show a concerning bearish structure for the TAO token in the short term. The daily MACD has confirmed a negative crossover, while the price has rejected a descending trendline for the second time.
Despite the volatility, the development team responded with the Teutonic-I update and the BIT-0011 proposal. These measures aim to stabilize governance and prevent coordinated subnet exits from draining liquidity in the future.
The support zone between $250 and $263 represents the most important wall of contention for bulls. If this level fails to sustain the selling pressure, the price could quickly seek the $200 zone.
On the other hand, a 340% increase in social interest has been reported, suggesting high media attention on the project. This phenomenon usually precedes high-volatility movements in both directions before defining a clear trend.
Nevertheless, analysts suggest that a recovery above $281 is vital to restore the AI narrative. Only a solid close above that level would open the door to reclaiming the $330 range.
While the market absorbs the selling pressure, many investors are rotating capital toward new infrastructures. Trust in Bittensor’s coordination layer remains the determining factor over technical analysis.
The network’s future depends on the acceptance of the new governance proposals. If decentralization of decision-making power is achieved, the project could regain its leadership position in the artificial intelligence sector.
