Bittensor (TAO) Highlights Potential Reversal Setup – Will It Bounce Back?

Date: Mon, Dec 22, 2025 | 12:45 PM GMT

The broader cryptocurrency market is showing relative strength at the start of the week, with both Bitcoin (BTC) and Ethereum (ETH) trading in the green. This stability in the majors has helped lift sentiment across the altcoin space, and** Bittensor (TAO)** is beginning to show early signs of a potential shift in momentum.

TAO is posting modest gains, but more importantly, its recent price action is starting to outline a clear technical structure on the daily chart. While the trend has been bearish for several weeks, the current setup hints that TAO could be positioning for another upside attempt if key levels are reclaimed.

Source: Coinmarketcap

Power of 3 Pattern in Focus

On the higher-timeframe chart, TAO appears to be forming a classic Power of 3 structure, a pattern often associated with market cycle lows and early trend transitions. This structure typically unfolds in three stages: accumulation, manipulation, and expansion, with the strongest directional move usually emerging once the final phase begins.

Earlier, TAO spent a prolonged period moving sideways within a clearly defined range between $314.97 and $260.39. This low-volatility phase, highlighted by the grey box on the chart, reflects the accumulation stage, where price remained compressed and market participation gradually shifted from weak hands to stronger holders.

That period of balance eventually broke down as broader market pressure intensified. TAO lost the $260.39 support level and accelerated lower, sliding toward a recent low near $215.22. This sharp and impulsive move fits well with the manipulation phase of the Power of 3 pattern, where price briefly moves against the broader expectation to flush out late buyers and trigger stop losses.

Bittensor (TAO) Daily Chart/Coinsprobe (Source: Tradingview)

Importantly, selling momentum has started to cool near this lower zone. The most recent daily candles show smaller bodies and reduced downside follow-through, suggesting that bearish pressure may be weakening. TAO is now consolidating near the lows, which often signals that the market is attempting to stabilize after an aggressive sell-off.

What’s Next for TAO?

At the time of writing, TAO continues to trade within the broader manipulation zone, which calls for caution. The trend has not yet confirmed a reversal, but the structure is beginning to develop conditions that could support one.

For the bullish scenario to gain traction, TAO needs to reclaim the $260.39 level and establish acceptance above the declining 30-day moving average, which is currently acting as dynamic resistance. A sustained move back into the previous range would suggest that the manipulation phase is likely complete and that the market may be transitioning toward the expansion phase of the pattern.

If buyers manage to push price above $314.97 and hold that level as support, the chart projection opens the door for a move toward the $414.65 region. This area represents the measured expansion target from the prior range and implies a potential upside of roughly 80% from current levels if momentum accelerates.

That said, this setup remains highly conditional. As long as TAO trades below $260.39, downside risks cannot be ruled out, and the market remains vulnerable to further volatility. Holding recent lows and reclaiming key resistance zones will be critical for bulls looking to validate a bullish reversal narrative in the days ahead.

Disclaimer: The views and analysis presented in this article are for informational purposes only and reflect the author’s perspective, not financial advice. Technical patterns and indicators discussed are subject to market volatility and may or may not yield the anticipated results. Investors are advised to exercise caution, conduct independent research, and make decisions aligned with their individual risk tolerance.