TAO Technical Analysis Jan 21

TAO is positioned at a critical juncture at the 236.40$ level. Although the short-term downtrend dominates, the RSI declining to the 38 level and strong support levels across multiple timeframes make both bullish and bearish scenarios possible. Traders should be prepared for both possibilities and closely monitor trigger signals.

Current Market Situation

TAO’s current price is at the 236.40$ level, having experienced a 2.23% decline in the last 24 hours. Daily trading volume remains relatively high at 154.10 million$, while the price is stuck in the 232.10$ – 244.20$ range. Technical indicators are predominantly bearish: RSI at 38.22 is approaching oversold territory, MACD shows a negative histogram, and the price is trading below EMA20 (262.27$). The Supertrend indicator is giving a bearish signal and marking 289.78$ as resistance.

In multi-timeframe (MTF) analysis, a total of 11 strong levels were identified across 1D, 3D, and 1W charts: 2 supports/2 resistances on 1D, 1 support/3 resistances on 3D, and 2 supports/4 resistances on 1W. Critical supports are 233.03$ (score 68/100) and 206.30$ (score 68/100), while resistances are 244.27$ (score 66/100) and 277.58$ (score 60/100). This structure indicates the price is prone to a breakout in either direction. Traders should base decisions on volume increases and candlestick formations.

Scenario 1: Bullish Scenario

How Does This Scenario Unfold?

For the bullish scenario, the 244.27$ resistance must first be clearly broken. This breakout should be supported by increasing volume and confirmed by a daily close. Positive divergence on RSI (price making a new low while RSI makes a higher low) or MACD histogram approaching the zero line could provide a bullish signal. Breaking above EMA20 (262.27$) signals a short-term trend reversal. In a broader context, Bitcoin testing the 90.258$ resistance could lift TAO. In this scenario, the Supertrend switching to bullish mode (breakout without staying below 289.78$) would be strong confirmation. Traders may consider entering long positions above 233$ with a stop-loss, but always adhere to their own risk management.

Target Levels

The first target is the 277.58$ resistance; if broken, momentum increases, and the next target could reach 334.75$ (score 19). Fibonacci extension levels and MTF resistances support these targets. The potential risk/reward ratio (R/R), calculated from a 236$ entry, is around 1:2.5 (115$ downside risk vs 334$ upside reward). This scenario remains valid as long as the 233$ support holds; a break invalidates it.

Scenario 2: Bearish Scenario

Risk Factors

The bearish scenario is triggered by a break below the 233.03$ support. This breakout should be confirmed by high-volume red candles and a daily close. MACD forming a deeper negative divergence or RSI dropping below 30 would increase selling pressure. Bitcoin breaking the 88.339$ support could accelerate a general altcoin correction. The Supertrend maintaining its bearish signal and distancing from EMA20 indicates trend continuation. An increase in selling volume instead of decreasing volume strengthens this scenario. Traders may consider short positions below 244$ with a stop-loss above 244$, but should not ignore market volatility.

Protection Levels

The first protection level is 206.30$; if broken, the next target is 115.70$ (score 22). MTF supports highlight these levels. The R/R ratio from a 236$ entry is approximately 1:1.0-1:1.5 (334$ upside risk vs 115$ downside reward). The scenario remains valid with a retest and rejection at the 244.27$ resistance; a close above it signals invalidation.

Which Scenario to Watch?

The decision point is the breakout in the 233$-244$ range. For bullish: Volume increase + RSI divergence + BTC above 90k. For bearish: Selling pressure in volume + MACD deepening + BTC below 88k. In both scenarios, seek confirmation from 4-hour chart candlestick patterns (bullish engulfing or bearish pinbar). Volatility is high; monitor news flow (TAO ecosystem updates). Get additional data from TAO Spot Analysis and TAO Futures Analysis pages.

Bitcoin Correlation

TAO shows high correlation with Bitcoin (usually 0.8+). BTC is currently at 89.279$ with a 1.96% decline in a bearish trend; Supertrend gives a bearish signal. BTC breaking supports at 88.339$ or 86.536$ would pressure TAO below 233$ and strengthen the bearish scenario. Conversely, BTC surpassing the 90.258$ resistance could propel TAO upward. If BTC dominance is rising, be cautious with altcoins; key BTC levels: Supports 88.339$/86.536$, Resistances 90.258$/92.495$. TAO traders should prioritize monitoring the BTC chart.

Conclusion and Monitoring Notes

TAO’s future hinges on the breakout in the 233-244$ range. The bullish scenario could head to 334$ with momentum and BTC support, while the bearish could target 115$ with selling pressure. Monitoring points: 1) Volume profiles, 2) RSI/MACD divergences, 3) BTC key levels (88k/90k), 4) MTF closes. This analysis provides a framework for traders to develop their own strategies. Follow the market regularly and stick to risk management.