TAO crypto faces 11% dip, consolidates below $500 – What now?

Key Takeaways

TAO has a strongly bullish structure on both the daily and weekly timeframe price charts, but this has not translated into a breakout past the $500 resistance. 

Bittensor [TAO] continued to trade below the long-term resistance at $500, despite the 35% rally the altcoin has made in the past three weeks.

A bearish divergence between the price action and the momentum of the asset saw an 11% price reset.

In the lower timeframes, TAO appeared to be consolidating. Over the weekend, the price action has been restricted from $425-$435.

Bitcoin [BTC] saw a 0.65% price dip on the 28th of July, which did not help Bittensor bulls.

Mapping the course ahead for TAO

Investors and traders can take heart in the fact that the weekly and daily swing structures were both bullish. June’s high of $443 was surpassed earlier in July. This has set the token up for a rally to the local high at $489.

Before this rally could complete, the MFI made a lower high while the price made a higher high. Marked in orange, this bearish divergence was followed by a price dip to reset the $400 support zone.

The CMF continued to move above the +0.05 level, showing sizeable buying pressure. Overall, after the retest of $400, Bittensor would likely be ready to go higher still.

A drop below $400 was not expected in the coming days.

The liquidation heatmap also highlighted the $400 level as a notable magnetic zone. In the event of a price drop, a bullish reversal would occur from the $392-$400 area.

In the short-term, the $420 and $442 levels are also ones to watch out for.

The price could meander between these two levels over the next few days, consolidating and building up steam before its next impulse move.

Until then, traders can be patient and try not to get chopped up trading the lower timeframes.

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion