Key Highlights
- On April 8, Covenant AI publicly withdrew from the Bittensor ecosystem, citing centralized governance issues involving co-founder Jacob Steeves
- The TAO token plummeted approximately 25–30% from weekly peaks, sliding from $337 down to the $249–$253 range
- More than $650 million in market capitalization evaporated, accompanied by $9.1 million in forced long position closures
- Daily trading activity exploded to $1.72 billion on April 10, compared to typical volumes around $500 million earlier in the month
- Chart patterns suggest TAO could experience an additional 25–45% correction, potentially reaching the $144–$230 zone
The Bittensor protocol’s native cryptocurrency experienced a significant downturn this week following public accusations from a prominent subnet operator regarding alleged centralized governance practices.
On April 8, Covenant AI declared its complete withdrawal from the Bittensor network. Two days later, founder Sam Dare published an extensive explanation detailing the motivations behind this exit.
According to Dare’s statement, Jacob Steeves, one of Bittensor’s co-founders, has allegedly retained authoritarian control over network operations. This accusation stands in stark contrast to Bittensor’s fundamental value proposition as a permissionless, decentralized artificial intelligence infrastructure where independent subnets operate autonomously.
The accusations encompass multiple specific instances, including unilateral suspension of subnet reward distributions, overriding decisions made by subnet administrators within their own governance channels, and removing projects from the ecosystem without adhering to established governance frameworks.
Perhaps most damaging among the claims, Dare asserted that Steeves weaponized substantial, public token disposals as retaliatory measures to enforce conformity during disagreements. “These weren’t governance actions executed through open, democratic processes,” Dare stated. “They represented unilateral decisions by a single individual who never truly decentralized authority.”
Dare further suggested that other members of the project’s leadership function primarily as “liability buffers” while Steeves operates without meaningful accountability.
How Markets Responded
The TAO token experienced roughly a 25% decline within six hours following these revelations, plunging from $337 to $253. This dramatic selloff eliminated more than $650 million from the token’s total market capitalization, reducing it to $2.57 billion.
Market activity surged dramatically, with trading volume reaching $1.72 billion on April 10—substantially higher than the approximately $500 million daily average observed in early April. The liquidation event coincided with volume increasing by roughly 250%, indicating widespread market involvement in the downward movement.
Within derivatives markets, approximately $9.1 million worth of leveraged long positions faced liquidation, representing $9.71 million of the total liquidations that primarily impacted bullish speculators. Numerous traders maintaining optimistic positions were unprepared for the sudden reversal, intensifying downward momentum through cascading forced sales.
While TAO has experienced modest recovery since bottoming, it continues trading 12.8% lower over the past week. The token maintains a 37% gain across the trailing 30-day period.
Chart Analysis
TAO is presently trading within the 0.382–0.5 Fibonacci retracement zone. Historical precedent from November 2025 shows that breaking below this technical area resulted in a decline exceeding 30%. A comparable formation in June 2025 witnessed TAO finding support around the 0.618 Fibonacci level before reversing higher.
Potential Downside Scenarios
Should TAO follow the June 2025 trajectory, the token may retreat toward the 0.618 Fibonacci support level positioned near $230. Alternatively, if the November 2025 pattern materializes, the 1.0 Fibonacci objective lies around $144, representing approximately 45% downside from present values.
On April 10, trading volume peaked at $1.72 billion, marking the highest single-day activity recorded this month.
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