Bittensor Price Crashes After Covenant AI Dumps 37,000 TAO

Key Insights

• Covenant AI exited Bittensor and sold over 37,000 TAO tokens, triggering heavy selling pressure and wiping out recent market gains.

• Sam Dare accused Jacob Steeves of centralized control, fueling concerns among traders about governance transparency within the broader Bittensor ecosystem.

• Analysts tracked TAO below its 200-day moving average, while traders monitored support near $250 amid accelerating panic selling.

Bittensor native token TAO plunged nearly 20% on April 10 after Covenant AI announced a complete exit from the network and sold more than 37,000 tokens. The sharp decline erased a large share of the token’s recent gains and triggered heavy selling across major exchanges. Consequently, traders reacted quickly as concerns around governance and decentralization spread through the ecosystem.

Covenant AI founder Sam Dare accused Jacob Steeves of maintaining centralized control over network decisions despite public claims of decentralization. Dare described the governance model as “decentralization theatre” and claimed important decisions lacked wider community input. Additionally, Covenant AI alleged that several of its subnets faced punitive actions that included emission suspensions and moderation restrictions.

Massive Token Sale Deepens Pressure

The fallout intensified after Dare confirmed the sale of Covenant AI’s TAO holdings, which reportedly exceeded 37,000 tokens. The move added strong selling pressure to an already nervous market after TAO had rallied more than 100% during the previous month. Besides, investors reacted to allegations of insider token deals, which further damaged confidence across the Bittensor ecosystem.

TAO fell from above $340 to nearly $263 within a single trading session as volumes surged more than 143%. The spike in activity reflected aggressive profit-taking and panic-driven exits from short-term traders. However, larger trading platforms continued to show balanced positioning, suggesting that some market participants still expect stabilization after the sudden correction.

Analysts Watch Key Technical Levels

Technical indicators also reflected weakening momentum after the sharp downturn. Popular trader Cheds Trading noted that TAO dropped below its 200-day moving average, which often signals growing downside pressure. Moreover, analysts continue watching the $250 area closely because it aligns with the token’s 50-day moving average and remains an important support level.

The relative strength index dropped to 41, highlighting fading bullish strength after weeks of strong upward movement. TAO futures also weakened across several exchanges as traders reduced short-term exposure following the selloff. Significantly, crypto analyst Michaël van de Poppe described the decline as an overreaction caused by panic selling and the sudden subnet exit.

Despite the market turmoil, some traders believe the Bittensor network could recover once selling pressure eases. Van de Poppe stated that he still holds his TAO position and may increase exposure near current levels. Hence, attention now remains fixed on whether TAO can defend support near $250 and regain momentum after the decline