Bittensor price crashed over 25% within hours after Covenant AI, one of the largest and most active subnets on Bittensor, recently exited the network over centralization concerns.
Summary
- Bittensor (TAO) plunged 25.6% from $340 to $253 after Covenant AI exited the network, triggering nearly $9 million in long liquidations.
- Covenant AI founder Sam Dare accused Jacob Steeves of centralization, alleging emission cuts and unilateral control over subnet operations.
- Technical breakdown below key support levels signals further downside risk, with price eyeing $236 and potentially $175 if selling pressure continues.
According to data from crypto.news, Bittensor (TAO) price fell 25.6% from $340 to an intraday low of $253 on Friday, erasing close to $900 million from its market capitalization. Trading at $266.7, the token has dropped to levels not seen since mid March.
The sharp drop in price triggered nearly $9 million in liquidations from long positions as bulls were caught off guard after weeks of betting on continued upside.
Bittensor price tanked after Covenant AI, the biggest operator of several high-emission subnets, including SN3, SN81, and SN39, officially announced its departure from the Bittensor network.
In an official statement on April 10 on X, Covenant AI founder Sam Dare accused Bittensor founder Jacob Steeves of betraying the network’s core promise of decentralization.
The post, which garnered over 1 million views and nearly 800 likes, claimed Steeves suspended emissions to Covenant’s subnets, stripped their moderation rights over their own community channels, and unilaterally abandoned critical subnet infrastructure. The team also said leadership deprecated infrastructure and applied direct economic pressure during the height of the conflict.
“Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus,” said Dare.
For context, decentralized, permissionless AI training is not just a theoretical concept for this team; Covenant AI successfully tested decentralized LLM models on the network, notably completing the 72 billion parameter Covenant 72B run across more than 70 independent contributors.
Following the exit, community members noted that Dare has sold all of his subnet holdings, effectively rugging Bittensor and crushing demand for the token. The founder’s wallet held more than 37,000 TAO tokens, and its liquidation led to the wipeout of nearly $900 million from the market cap.
On the daily chart, Bittensor has broken below an ascending parallel channel pattern that has formed since late February this year. A breakdown from such a pattern usually signals a trend reversal and a potential for further declines as investors rush to exit.
Subsequently, the token fell below the 38.2% Fibonacci retracement level at $294.2, a level that had served as a strong support floor in recent weeks.
Hence, the token eyes a drop to $236 next, which aligns with the next Fibonacci retracement in the series, specifically the 23.6% Fibonacci retracement level. Failure to hold above this could lead to a reset of the early March low around $175.
Technical indicators seem to support the bearish bias at least in the short term. Notably, the Supertrend has flipped red for the first time since March 10, indicating a shift in market momentum.
Also, the RSI has plummeted to 41, suggesting that while the asset is approaching oversold territory, the current selling pressure remains dominant
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
