Bittensor's TAO token sees a sharp 60% correction from its all-time high, leaving traders torn: seize the dip or avoid catching a falling knife? The liquidation heatmap shows a significant cluster between $291 and $302, potentially offering a strategic entry point. But is the timing truly favourable?
Bittensor has lost 60% of its value since its ATH, a movement that reflects the violent corrections typical of the crypto market. This drop is explained by several combined factors: Massive profit-taking after a parabolic rally, a globally deteriorated market sentiment, and cascading liquidations that amplified volatility.
On-chain data shows that trading volume exploded during the descent, indicating partial capitulation from holders. Active addresses also experienced a notable decline, suggesting that some investors exited their positions in the face of uncertainty. This dynamic is not uncommon after euphoric phases, where late entrants find themselves trapped.
The central question remains whether this correction represents a simple healthy retracement or the beginning of a prolonged bearish trend. Bittensor’s history shows that the project has already navigated significant consolidation phases before resuming its bullish trajectory, but each crypto cycle has its own dynamics.
Analysis of the liquidation heatmap reveals a massive liquidity cluster between $291 and $302, a zone that concentrates significant liquidation orders and historical support levels. This range represents a technical confluence point where numerous traders have placed their stops and buy orders.
From a price action perspective, this zone corresponds to a former resistance level that could now serve as support. Market makers often target these liquidity zones to absorb available supply before initiating a potential bounce. However, if this level fails, the next major support zone would be significantly lower.
Technical indicators show contradictory signals. The RSI displays oversold levels that have historically marked turning points, but the moving average structure remains bearish. Bounce volumes remain weak compared to selling volumes, suggesting an absence of buying conviction for the moment. A return above $350 with volume would confirm a change in dynamics.
Entering Bittensor under these conditions involves a high-risk strategy that requires strict capital management. Experienced traders generally adopt a staggered approach: Buying in stages rather than deploying all their capital at once. This method allows for dollar-cost averaging if the correction continues.
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