Bittensor’s native token TAO faced intense selling pressure following allegations tied to its governance structure.
Market participants reacted quickly as concerns emerged over centralized control within the network.
The developments challenged the project’s decentralization narrative and triggered widespread liquidation activity.
As a result, TAO recorded sharp losses alongside a surge in trading volume.
Governance allegations shake Bittensor network
The controversy began when Covenant AI announced its full withdrawal from the Bittensor platform on April 8.
Two days later, founder Sam Dare published a detailed statement explaining the decision. Dare claimed that Jacob Steeves exercised unilateral control over protocol operations.
According to Dare, Steeves halted emission distributions to a subnet without consensus. He also overruled subnet administrators within governance channels.
Dare added that projects faced removal without following documented procedures. These claims directly contradicted Bittensor’s positioning as a decentralized and permissionless AI infrastructure.
Dare further alleged that Steeves used public token liquidations as retaliatory measures during disputes. He stated that these actions bypassed open governance mechanisms.
He described them as decisions made by a single authority figure. Dare also suggested that other leadership members acted as liability buffers rather than active decision-makers.
TAO price collapse and market liquidations
TAO price reacted sharply after the allegations surfaced. The token dropped 25% within six hours, falling from $337 to $253.
This decline wiped out over $650 million in market capitalization. The total valuation dropped to $2.57 billion during the selloff.
Trading activity surged alongside the price decline. Daily volume reached $1.72 billion on April 10. This figure stood well above the roughly $500 million daily average earlier in the month.
The spike represented a 250% increase in trading activity, signaling strong market participation.
Derivatives markets reflected heightened volatility. Long position liquidations reached $9.1 million.
Total forced closures for bullish traders hit $9.71 million. Leveraged long positions triggered margin calls, which accelerated the downward momentum.
TAO showed a modest rebound after hitting its low. However, the token remained down 12.8% over the past seven days. Despite recent weakness, TAO still held a 37% gain across the last 30 days.
From a technical perspective, TAO traded within the 0.382–0.5 Fibonacci retracement zone. Historical data showed similar breakdowns led to deeper losses.
In November 2025, a breach below this range resulted in losses exceeding 30%. Meanwhile, a June 2025 pattern saw support form near the 0.618 level before recovery.
Bittensor technical analysis
The Bittensor price 1-day chart shows a recent bullish trend followed by a sharp pullback.
Price previously rallied strongly, then formed lower highs, signaling weakening momentum. The current price is around $261, showing a short-term bounce after a recent drop.
The RSI is near 42, indicating weakening momentum and approaching oversold conditions. The RSI moving average remains above RSI, confirming bearish pressure.
Meanwhile, MACD shows a bearish crossover, with the histogram turning negative. MACD lines are diverging downward, signaling increasing selling momentum.
