- Bittensor’s TAO has dropped by almost 4% today, April 16, 2026.
- Covenant AI’s exit triggered the downfall.
- The price of the token has come down to $240 from a level of $350 in the past month.
Bittensor’s native token TAO is currently experiencing a downfall of almost 4% and the price of the token is hovering around the $240 mark. The price dropped down from $350 to $240 amid governance concerns, panic selling, and weakening market confidence. The token is underperforming when compared to the broader crypto market which is experiencing an uptick of 1.2% as per CoinMarketCap.
The selloff has also been amplified by lower liquidity and a broader rotation away from the AI narrative, even as the wider crypto market has held firmer.
At press time, the price of the token stands at $239.02 with a drop of 3.74% in the last 24-hours as per CoinMarketCap.
What Triggered The Drop
The main catalyst in recent times was Covenant AI’s exit from the TAO ecosystem. This exit raised questions about governance and control inside Bittensor.
Reports tied the move to a 37,000 TAO sale by Covenant’s founder, a move that triggered panic selling, liquidations, and a broader loss of confidence among the holders. That combination turned a single event into a stronger chain reaction throughout the market.
Why Selling Accelerated?
The second layer that was added was a weakness that came from the market structure. TAO’s trading volume dropped suddenly, which made the token more vulnerable to outsized price moves when sell orders hit a thin order book. According to the above screenshot, the trading volume decreased by 34.82% in the last 24-hours.
In that kind of setup, even modest selling can give rise to a greater decline than normal because there is less buying pressure to absorb it.
Governance Debate Intensifies
At the same time, the crisis has accelerated discussion about how Bittensor should handle subnet ownership and long-term alignment. A draft proposal known as BIT-0011 would introduce “locked stake” and “conviction,” allowing subnet ownership to shift toward participants who commit capital for longer periods.
Supporters, on the other hand, are arguing that this move could reduce the risk of founders of insiders destabilizing a subnet by selling suddenly. While critics note that this is still only a draft, and this may change before implementation.
Market Structure And Outlook
Technically, TAO now looks fragile as the price is hovering below the $250 area, with near-term downside risk toward the $230-$235 zone if selling continues. A recovery would likely require a convincing reclaim of the $260 level alongside stronger volume. This would suggest that the buyers are finally stepping in with more confidence.
Till this happens, the market appears to be treating Bittensor’s TAO as a high-beta asset that is reacting more to ecosystem trust than to the broader crypto backdrop.
Investor Sentiment
Even though there is a drop, crypto influencers such as Michaël van de Poppe see the event as a stress test rather than a collapse. The influencer also said in an X post that he still holds a large TAO position and framed the move as a major ecosystem test that could eventually lead to stronger governance and renewed momentum.
That view is now split across three broad paths, where a sharp rebound if sentiment stabilizes, a consolidation phase if confidence rebuilds slowly, or deeper downsides if more subnets or holders exit.
What Happens Next
As of now, the key question is whether Bittensor can turn this crisis into a governance reset or whether the current weakness becomes a longer de-rating event.
If the network can calm the market, regain trust, and advance proposals like BIT-011, the correction may prove temporary. If not, TAO could remain trapped in a bearish range until buyers regain conviction and volume returns.
Also Read: Bittensor Price Forecast: Is $570 the Next Big Target for TAO?
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