TAO, the altcoin that powers Bitensor’s decentralized machine learning network, has seen its price rise by 36% in the past 24 hours as the overall cryptocurrency market rebounded after Monday’s decline.
This has led to increased activity in the token derivatives market. However, this is not without its problems.
Rising Interest in TAO Derivatives
According to Coinclass data, in the past 24 hours, the daily trading volume of the TAO derivatives market increased by 14%. Increased trading volume in derivatives means increased interest in the underlying asset. Since derivatives allow you to speculate on price movements without owning the underlying asset, a surge in trading volume may indicate that more traders are engaging in speculative activity, thereby increasing price volatility.
The increase in open interest on TAO confirms the influx of new traders over the past 24 hours. According to Coinclass, outstanding interest on the token increased by 32% during the period, totaling $38.31 million.
Market Analysis and Predictions
Looking at TAO’s 1-day chart, the double-digit price gains over the past 24 hours may not be sustainable. This is because the bearish bias against altcoins remains strong. At press time, the Elder-Ray Index returned a negative value of -64.2. The Elder-Ray Asset Index measures the relationship between the power of buyers and sellers in the market. Negative values mean that the bearish power is greater than the bullish power.
If the downtrend continues and puts downward pressure on TAO, the price could drop below $200 and trade at $163.70. However, the bullish divergence between TAO price and Chaikin Fund Flow (CMF) suggests a rebound is possible, with the coin value potentially rising to a two-month high of $419.80.
Implications of Funding Rates
TAO’s negative funding ratio indicates that most new traders opened short positions. Negative funding rates mean that more traders are buying assets expected to fall in price than assets expected to rise in price. If this buying trend strengthens, the coin value could rise further, despite the bearish bias in the market.
The information contained on the BeInCrypto website is published in good faith and for informational purposes only. Users are solely responsible for any consequences arising from the use of the information on this website. In addition, part of the content is the AI translated English version of BeInCrypto articles.
