Bittensor [TAO] leads AI sector with 11% daily gains – Is $500 next?

• TAO led crypto coins in the AI and big data sector with over 11% gains in the last 24 hours at the time of writing.
• The price action of TAO broke back above the $400 mark following a broader market recovery that could be offset.

Bittensor [TAO] gained 11.42% in a day, trading at $431.57, at press time, where it led the crypto coins in the AI and big data sector.

Internet Protocol [ICP] was up by 10.21%, at a price of $6.19 and registering strong trading volumes. Near Protocol [NEAR] also went up by 6.7% as per data from CoinMarketCap.

Moreover, at the time of writing, Render [RNDR] rose 4.19% and was priced at $4.01. Artificial Superintelligence Alliance [FET] gained 1.74% while Filecoin [FIL] increased 4.67%, recovering earlier declines.

Injective [INJ]  added 3.95%, closing at $13.64. TAO and ICP ranking at the top reflected an overall positive movement in the sector.

Will TAO’s bullishness hold?

TAO surged past the top of its descending channel, breaking above the $429.3 level and signaling a potential trend reversal as bullish volume intensified.

The MACD line climbed to 10.7, crossing above the signal line at 5.0, with the histogram reading 5.7, all pointing to rising positive momentum.

This was further supported by the Chaikin Money Flow at 0.30. This indicated that capital continues to flow into the market, reinforcing TAO’s bullish outlook.

Source: TradingView

If the bulls are in power, TAO may rise to its next significant resistance target of $500. If TAO can’t maintain prices above its upper channel trendline at $400, the price may drop again below $400.

Alternatively, if the price of Bittensor drops below $400, the next key supports would be at $373 and $349, which may lead to further declines in the market.

For this outlook to stay, investors must continue buying the TAO, and the CMF must be higher than the neutral value. If the lines of the MACD cross in the opposite direction, it may show that the momentum is running out.

As per the indicators, the market could continue gaining as long as the momentum does not fall sharply.

Leveraged longs dominate shorts

Notably, a significant number of 50x long positions were visible in TAO’s liquidation map between $417 and $430.

These were further amplified with more leverage: 25x for the gap between $410 and $422 and 10x from $405 to $415.

Alternatively, $440 and above were mainly occupied by shorts that used 5x and 10x leverage.

Source: CoinGlass

TAO’s price at $429.6 sits close to a potential support break, where a sharp sell-off could occur. If the price drops to $417, it might trigger the liquidation of a significant number of long positions.

On the flip side, a move above $435 could prompt short sellers to exit quickly, fueling a strong upward surge as more traders are forced out.