Fractal data: The price of TAO on Bittensor could drop sharply by 40% within five weeks.

The recent 160% growth of Bittensor (TAO) is beginning to show signs of weakness as a golden cross pattern appears on the chart — a signal that has historically been accompanied by significant corrective phases.

TAO/USD Daily Chart | Source: TradingView## TAO Price Faces 40% Correction Risk in the Short Term

As of March 26, the 20-day EMA has crossed above the 200-day EMA — a technical structure often viewed as a bullish signal. However, for TAO, this pattern has frequently appeared near local peaks, often leading to a short-term rally before a strong reversal.

TAO/USD Daily Chart | Source: TradingViewHistorical data shows that in the three most recent similar crossovers, TAO subsequently dropped approximately 38.50%, 32.50%, and 45.50% within 5–6 weeks. On average, the correction level is around 40%, increasing the likelihood that the price could retreat to the $200 range by early May if the scenario repeats.

The downward pressure is further reinforced as the RSI has remained above the overbought threshold of 70 for several weeks, reflecting that the rally has occurred too quickly and poses risks for profit-taking or technical correction in the short term.

Additionally, macroeconomic factors also lean toward a negative scenario: escalating U.S.–Iran tensions have driven oil prices higher, increasing inflationary pressures and limiting the scope for policy easing from the U.S. Federal Reserve (Fed).

The Rally Has Not Yet Reached Extreme Euphoria

Despite a significant increase in online discussions related to TAO, data from Santiment shows that the market has not yet entered a state of excessive euphoria — a factor often associated with price peaks.

TAO Social Communication Volume and Positive/Negative Sentiment | Source: SantimentDiscussion volume on platforms like X, Reddit, and Telegram has hit the second-highest level in six months, only surpassed by the peak phase when TAO reached $529 in November.

Notably, the positive comment ratio is currently only at 1.5:1 compared to negative comments, reflecting that investor sentiment remains relatively cautious.

According to Santiment, this is a positive signal indicating that there is still room for growth, as the market has not been dominated by excessive FOMO sentiment — a factor that typically signals a topping phase.

However, the fractal structure of the golden cross shows that even rallies supported by improved sentiment can quickly turn into bull traps.

TAO/USD Daily Chart | Source: TradingViewIn the three previous similar setups, TAO still recorded additional gains of 15.6%, 5.7%, and 42.6% before reversing. On average, the increase following the signal reached about 21.30%, implying that the price could continue to expand to the $420 range or higher in the short term before entering a weakening phase.

Mr. Giáo