Bittenser KursTAO

Should you sell or should you buy $TAO? One of the biggest questions after the largest stress test on the ecosystem of #Bittensor. - The most important subnet left. Or did the subnet leave or was it just a single bad actor taking millions and leaving the ecosystem? - Price has gone down from $350 to $250. - Government trust has decreased, so second-order impacts has been taking a hit on the ecosystem. Now, I do have a large position of $TAO in my portfolio. The big question: what's the gameplan and how significant is this recent correction? The Events - Covenant AI publicly posts to leave the $TAO ecosystem as they question the governance of TAO. As an additional event, the founder sells 37K TAO on the open markets, causing a big chain reaction of events to happen. --> People reading the announcement from the biggest subnet will actually panic sell their positions. --> Leverage on longs are getting stopped out or squeezed out of the position. --> Causing more negative slumb on this. - Negative response on the ecosystem of $TAO due to unstaked TAO causing a continuation of the downwards trend to happen. 1. Convenant dumped 37K TAO --> price drops. 2. Other stakers see price drop --> they unstake to protect their position. 3. Unstaking goes through their AMM which makes the conversion worse when there's a panic event causing more stakers to unstake their positions. 4. Validators are seeing their stake go away and their consensus power drops. 5. Rewards are decreasing. 6. Lower rewards, higher risk implies decreasing your position --> causing a negative flywheel. - Const came out with a response on the post of Convenant and public statements on the events to clarify everything from the $TAO standpoint. - Teutonic-I launched -> a new version of Templar in which the target is to build a model to hit the 1T Parameter. They are already tested a 1B model. - BIT-0011 proposal -> introducing 'Locked Stake and conviction'. A new mechanism to increase the conviction, crediting your subnet by an alpha score and erasing the risks of having founders of subnets being able to sell their position and therefore harm all the community holders. The mechanism: - You lock your alpha tokens on a subnet for a choisen period. - The lock is self-decided --> the score starts at 100% and the closer you get to expiry, the lower the score will be. - Every 30 days there's a new conviction score. - The staker with the highest conviction score will be the subnet owner. - You can't unstake the locked tokens as long as the conviction exists. A strong proposal and all these events happened within 72 hours of the actual event. Of course, it's not clear whether the proposal will pass in this format, however, discussion and open debate helps assisting on getting a better system to exist. That's the upside of decentralized ecosystems --> a stresstest happens --> renewed model designed --> implemented until next stresstest happens. That's how new technology moves forward. The Price of $TAO The price, in the meantime, has dropped from $350 to $250 and I would say that there are several reasons for this, which I've also outlined in the previous blocks. - The fact that a founder dumps 37K TAO impacts the price of TAO. - This impact triggers trade-based events --> liquidations, stops and such. - The trust is lost for a moment, therefore the event itself will have some tail impacts as some parts of the staked tokens want to get out, or holders don't trust this anymore. This latter is where the markets need to find an equilibrium. The day of the crash, price dropped to $250. The price today is at $253. To be fair, that's not a bad performance for such a big stresstest for the entire ecosystem. What are my scenarios? I've got three main scenarios, and I'll reason on this for a little bit. The main thesis is that we're still at the forefront of the big AI <> Crypto narrative, so it's a bit of shame to see this happening to the protocol. Anyways, this can also provide a big opportunity to be reclaiming price as fast as possible. The recent crash is a 1.5 sigma crash, not outrageous, but still significant. Scenario 1 - V-Shape to $300-340 If price remains flat over the next week and the new proposals are being approved, I think that this event will fly over and the momentum kicks back into the protocol. It can help whether the markets are picking up momentum, as then you could theoretically speak of an opportunity to be accumulating one of the largest protocols within the AI framework of crypto, especially since subnets themselves can reach millions of valuations. Additionally, the valuation of $TAO compared to OpenAI or Anthropic is still massively low, but once one of the subnets gets attention, it's expected to grow quickly. I would give this scenario approx 45%. If BIT-0011 is approved, this can go up to 60%. Scenario 2 - Consolidation between $200-260 The second most likely scenario, if there's no approval of the proposals or if there's no implications of an ecosystem getting better after such a stresstest, or whether the outflow remains significant, you could theoretically expect the price to continue to fall. In that scenario: new interested buyers at these levels (or validators) < outflow of the ecosystem and that's a bad sign. This can last for an X amount of time, but shouldn't be too long to get the momentum back up. On the other hand, building trust is a long process and therefore it might require some time to get that back in the game, hence the likelihood of the consolidation. I would give this scenario ~40% of a likelihood. Scenario 3 - A retest at $180 and continuation of the crash This would only be possible if there's a strong domino-effect taking place under the following assumptions - Multiple subnets are leaving - There's a strong outflow of tokens from the ecosystem - There's no approval of the new protocol proposals I don't think this is likely, so there's a probably 10-15% implication on this. The altcoin portfolio and the position Based on my analysis and the thesis, I don't see a clear reason to be jumping around and to be buying a position, as of yet. I'm already holding a strong position into this one. I'm fully going to be holding to this, but I'll be following the news and the dialogue in the ecosystem. If it does drop further due to macro-economic events, and not due to internal events, for instance to $200-210 and the protocol approves the protocol changes, then I'm willing to be adding funds. Also, I'm not willing to sell, as the asymmetric opportunities are too large. If this is some sort of ETH-after-the-DAO type of moment, then there's no reason to be selling it, as the ecosystem will only become stronger. I'm holding and monitoring.

Should you sell or should you buy $TAO? One of the biggest questions after the largest stress test on the ecosystem of #Bittensor. - The most important subnet left. Or did the subnet leave or was it just a single bad actor taking millions and leaving the ecosystem? - Price has gone down from $350 to $250. - Government trust has decreased, so second-order impacts has been taking a hit on the ecosystem. Now, I do have a large position of $TAO in my portfolio. The big question: what's the gameplan and how significant is this recent correction? The Events - Covenant AI publicly posts to leave the $TAO ecosystem as they question the governance of TAO. As an additional event, the founder sells 37K TAO on the open markets, causing a big chain reaction of events to happen. --> People reading the announcement from the biggest subnet will actually panic sell their positions. --> Leverage on longs are getting stopped out or squeezed out of the position. --> Causing more negative slumb on this. - Negative response on the ecosystem of $TAO due to unstaked TAO causing a continuation of the downwards trend to happen. 1. Convenant dumped 37K TAO --> price drops. 2. Other stakers see price drop --> they unstake to protect their position. 3. Unstaking goes through their AMM which makes the conversion worse when there's a panic event causing more stakers to unstake their positions. 4. Validators are seeing their stake go away and their consensus power drops. 5. Rewards are decreasing. 6. Lower rewards, higher risk implies decreasing your position --> causing a negative flywheel. - Const came out with a response on the post of Convenant and public statements on the events to clarify everything from the $TAO standpoint. - Teutonic-I launched -> a new version of Templar in which the target is to build a model to hit the 1T Parameter. They are already tested a 1B model. - BIT-0011 proposal -> introducing 'Locked Stake and conviction'. A new mechanism to increase the conviction, crediting your subnet by an alpha score and erasing the risks of having founders of subnets being able to sell their position and therefore harm all the community holders. The mechanism: - You lock your alpha tokens on a subnet for a choisen period. - The lock is self-decided --> the score starts at 100% and the closer you get to expiry, the lower the score will be. - Every 30 days there's a new conviction score. - The staker with the highest conviction score will be the subnet owner. - You can't unstake the locked tokens as long as the conviction exists. A strong proposal and all these events happened within 72 hours of the actual event. Of course, it's not clear whether the proposal will pass in this format, however, discussion and open debate helps assisting on getting a better system to exist. That's the upside of decentralized ecosystems --> a stresstest happens --> renewed model designed --> implemented until next stresstest happens. That's how new technology moves forward. The Price of $TAO The price, in the meantime, has dropped from $350 to $250 and I would say that there are several reasons for this, which I've also outlined in the previous blocks. - The fact that a founder dumps 37K TAO impacts the price of TAO. - This impact triggers trade-based events --> liquidations, stops and such. - The trust is lost for a moment, therefore the event itself will have some tail impacts as some parts of the staked tokens want to get out, or holders don't trust this anymore. This latter is where the markets need to find an equilibrium. The day of the crash, price dropped to $250. The price today is at $253. To be fair, that's not a bad performance for such a big stresstest for the entire ecosystem. What are my scenarios? I've got three main scenarios, and I'll reason on this for a little bit. The main thesis is that we're still at the forefront of the big AI <> Crypto narrative, so it's a bit of shame to see this happening to the protocol. Anyways, this can also provide a big opportunity to be reclaiming price as fast as possible. The recent crash is a 1.5 sigma crash, not outrageous, but still significant. Scenario 1 - V-Shape to $300-340 If price remains flat over the next week and the new proposals are being approved, I think that this event will fly over and the momentum kicks back into the protocol. It can help whether the markets are picking up momentum, as then you could theoretically speak of an opportunity to be accumulating one of the largest protocols within the AI framework of crypto, especially since subnets themselves can reach millions of valuations. Additionally, the valuation of $TAO compared to OpenAI or Anthropic is still massively low, but once one of the subnets gets attention, it's expected to grow quickly. I would give this scenario approx 45%. If BIT-0011 is approved, this can go up to 60%. Scenario 2 - Consolidation between $200-260 The second most likely scenario, if there's no approval of the proposals or if there's no implications of an ecosystem getting better after such a stresstest, or whether the outflow remains significant, you could theoretically expect the price to continue to fall. In that scenario: new interested buyers at these levels (or validators) < outflow of the ecosystem and that's a bad sign. This can last for an X amount of time, but shouldn't be too long to get the momentum back up. On the other hand, building trust is a long process and therefore it might require some time to get that back in the game, hence the likelihood of the consolidation. I would give this scenario ~40% of a likelihood. Scenario 3 - A retest at $180 and continuation of the crash This would only be possible if there's a strong domino-effect taking place under the following assumptions - Multiple subnets are leaving - There's a strong outflow of tokens from the ecosystem - There's no approval of the new protocol proposals I don't think this is likely, so there's a probably 10-15% implication on this. The altcoin portfolio and the position Based on my analysis and the thesis, I don't see a clear reason to be jumping around and to be buying a position, as of yet. I'm already holding a strong position into this one. I'm fully going to be holding to this, but I'll be following the news and the dialogue in the ecosystem. If it does drop further due to macro-economic events, and not due to internal events, for instance to $200-210 and the protocol approves the protocol changes, then I'm willing to be adding funds. Also, I'm not willing to sell, as the asymmetric opportunities are too large. If this is some sort of ETH-after-the-DAO type of moment, then there's no reason to be selling it, as the ecosystem will only become stronger. I'm holding and monitoring.

TAO Pivot Watch Current State: TAO is showing bearish pressure, but early signs of a relief bounce are emerging on the MACD. The Key Level: The 254.33–258.44 zone is the must-hold floor to prevent a deeper drop. Next Move: Hold 254.33 to target 263.75; lose it, and the price likely slides to 247. $TAO

TAO/USDT krach firm AI