-7.69% for Bittensor as mass selloff follows Covenant AI departure

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Bittensor slides 7.69% today at $217

Highlights

Covenant AI's departure from Bittensor on June 2, 2026 triggered a 37,000 TAO token selloff, intensifying scrutiny over network governance and supply stability.
Bittensor maintains 128 subnets incentivizing AI contributors, with 11 million TAO in circulation from a total 21 million and a $2.8 billion market cap.
TAO/USD trades under key moving averages with technical indicators broadly bearish; price expected to range between $207.57 and $227.03, downside probability at 77%.

Supply shock and scrutiny as Covenant AI exit triggers TAO selloff

The exit of Covenant AI from the Bittensor ecosystem on June 2, 2026 led to a selloff of around 37,000 TAO tokens, which brought immediate scrutiny to the network's governance model, according to cryptodaily.co.uk. This event resulted in an abrupt increase in available supply and raised questions about the stability of the ecosystem. Meanwhile, Bittensor continues to operate 128 subnets where contributors are rewarded with TAO for AI tasks, as noted by cryptonews.net, and as of early June 2026, there is a reported circulating supply of 11 million coins out of 21 million maximum and a $2.8 billion market capitalization, according to fool.com.

Sell momentum and mixed signals as technical boundaries override

TAO/USD is currently trading below the MA-20 ($225.90), MA-50 ($233.33), and MA-200 ($253.42). The immediate resistance sits at the Ichimoku Kijun level of $222.75. Momentum indicators including MACD and ADX signal Sell, while RSI remains in Sell territory. In contrast, the Stoch RSI presents a Buy signal, pointing to a divergence in short-term oscillators. The CCI also confirms a Sell bias, and BBP reflects Oversold conditions intraday. The Awesome Oscillator is Neutral and does not provide additional directional bias.

Downside favored as low upside odds cap near-term TAO rebound

Over the next 2 sessions, price action in TAO/USD is likely to stay within the volatility band of $207.57 to $227.03. The probability of an upward move is relatively low at 23%, while downside continuation carries a higher statistical likelihood at 77%. Should the price break above $222.75, further upside could be triggered, whereas a fall below $207.57 would open the door for deeper correction.

Viktoras Karapetjanc, analyst at Traders Union, sees recent governance challenges and the Covenant AI exit as a short-term setback for Bittensor. He believes fundamentals like the ecosystem's scale and ongoing network participation still support a constructive outlook. Downside pressure remains dominant for now, but a breakout above $222.75 could improve sentiment. "If the network manages to address governance questions and demand recovers above key resistance, I expect Bittensor to regain upward momentum soon."

Earlier, analysts noted that Bittensor was under sustained bearish momentum despite network-level changes such as the protocol halving and ETP launch. The sharp TAO liquidation following Covenant AI’s exit further validates downside risks, underscoring the importance of monitoring potential volatility if the asset fails to hold above $207.57 in the near term.

Source of Data: TAO Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.