TAO Token Faces Potential 45% Decline Following Centralization Allegations Against Bittensor
Bittensor's native token faces mounting pressure with analysts forecasting additional double-digit losses as technical indicators align with deteriorating market confidence in the cryptocurrency.
The TAO token from Bittensor could experience a decline of as much as 45% over the next several weeks following Covenant AI's public declaration to completely withdraw from the platform, with the company being among the network's most significant subnet operators.
Key takeaways:
- Bittensor faced accusations of centralization from Covenant AI, triggering a 30% price collapse in TAO.
- Technical analysis using fractal patterns suggests the cryptocurrency could experience an additional 25%–45% decline in upcoming weeks.
TAO experiences 30% decline from peak weekly value
The price of TAO experienced approximately a 30% decrease from its peak for the week, settling around the $249 mark. The majority of this downward movement occurred following Covenant AI's public statement characterizing Bittensor as operating a "decentralized theater."
Through a statement released on Friday, the subnet's development team contended that Bittensor might not possess the level of decentralization it appears to have. This assertion directly contradicted Bittensor's fundamental value proposition, which centers on providing an open artificial intelligence network enabling various subnets to engage in fair competition.
Following the release of this allegation to the marketplace, market participants grew concerned that the fundamental narrative supporting the project was deteriorating. Should developers begin experiencing reduced confidence and departing the platform, market participants may anticipate diminished network activity, weakening TAO demand, and decelerated growth prospects over the long term.
The Friday price decline coincided with trading volume surging by approximately 250%, signaling that the majority of market participants supported the bearish perspective.
Within the derivatives market, liquidations totaled approximately $11.83 million in positions, with long positions accounting for $9.71 million of that figure. This data indicates that numerous bullish market participants were positioned incorrectly, contributing additional forced liquidation pressure to TAO's price decline.
Fractal analysis suggests TAO could experience additional 25%–45% price decline
According to earlier coverage by Cointelegraph, TAO was displaying signals of a potential 40% price drop following the confirmation of a golden cross pattern formed by its 20-day (green) and 200-day (blue) exponential moving averages (EMA).
By the end of Friday's trading session, the Bittensor cryptocurrency was trending toward the projected downside target of this bearish technical formation around $200, suggesting approximately 25% additional downside potential from present price levels.
Additional fractal pattern analysis reinforces the bearish outlook.
TAO is presently trading within a consolidation zone defined by the 0.382–0.5 Fibonacci retracement levels, representing an area that has previously served as a temporary consolidation region throughout TAO's larger-scale macro-top correction phases.
As an example, during November 2025, a breakdown below this identical Fibonacci range resulted in a price drop exceeding 30% down to the 1.0 Fib level and beyond, thereby completing a full retracement of the previous upward movement.
A comparable technical pattern developed during June 2025, when TAO penetrated below this same Fibonacci support zone but succeeded in finding stability around the 0.618 Fib level prior to mounting a recovery.
Should the historical pattern repeat itself, TAO could initially move downward toward its 0.618 Fib support level positioned near $230.
The current bearish fundamental backdrop may drive TAO even lower toward the 1.0 Fib retracement level situated near $144, representing approximately 45% downside from current trading levels.