TAO price at $261: shakeout before the rally or the start of a deeper decline

TAO is navigating a pivotal technical crossroads at $261, drawing attention from traders and analysts as the token trades below its 200-day moving average and red volume spikes point to rising selling pressure.

Technical picture: lower high and failed 200-day reclaim

TAO sits below its 200-day moving average near $281. The chart also reflects a lower high after a prior peak: the token moved from the $143 Fibonacci floor to $390, nearly tripling in value, but the rally failed to reclaim the 200-day moving average.

Analyst @2xnmore described the setup as a bearish warning signal, saying: “a lower high after a failed 200 MA reclaim is one of the cleanest bearish signals in technical analysis.”

TAO is at $261 right now.

Below the 200 day moving average. Fresh off a lower high at $390 after the November peak at $475. Volume spiking red today.

Two scenarios are playing out from here. Only one wins.

Scenario one: This is the shakeout before the move.

With the token below $261, traders are watching the next visible support zone between $200 and $220. A breakdown through that range could open the door to a retest of the $143 lows.

Such a move would imply a near 45% decline from current levels and would reset the token’s 2025 narrative, according to the article’s framing.

Potential downside path: support test and retest risk

The article links the current price action to a possible distribution phase, arguing that distribution patterns can resemble the current setup before price rolls over more broadly.

If TAO loses the $200–$220 support band, the next key reference point would be the $143 level, which previously held as a Fibonacci floor earlier in the year.

Fundamentals: counterargument for TAO bulls

Despite the bearish technical signals, the article highlights that TAO’s underlying ecosystem has not deteriorated. It cites real usage on Chutes, growing subnet activity, and institutional interest in Bittensor infrastructure as ongoing drivers.

It also notes that this divergence between price action and network utility has historically preceded recoveries in emerging crypto sectors.

In that context, the article points to the $143 Fibonacci level holding earlier in the year and producing a near tripling of price.

Key level to watch: $281 moving average reclaim

For the bullish case, the article emphasizes that a clean reclaim of the $281 200-day moving average—supported by above-average volume—would structurally shift the chart back toward bullish conditions.

Until that reclaim occurs, TAO is described as trading in a range where both outcomes remain technically possible, with the chart and fundamentals pointing in opposite directions.