TAO May Shift Toward $450 After Derivative Outflows, Spot Buying, and Bullish MFI Signals

• Derivative Drain: The unprecedented outflow forced a price collapse.

• Spot inflows climbed $13.7 million, indicating traders are buying on the dip.

• MFI remained above 50 and funding rates turned positive, signalling potential upside.

TAO’s sharp 15% drop shook the market as derivatives pulled $48 million out, yet spot buyers refilled the gap. Get the latest on TAO’s rebound strategy today.

What caused TAO’s sharp 15% fall?

TAO’s price suffered a steeper drop after a sudden $48 million exodus from futures positions, cutting the market’s open interest to roughly $270 million from a peak close to $340 million and triggering a cascade of liquidations across major exchanges.

How do current technical indicators point to a potential recovery?

Key gauges such as the Money Flow Index (MFI) climbed into the bullish band above 50, while the Accumulation/Distribution (A/D) line displayed a steady uptrend. These signs suggest that, despite lingering derivative pressure, accumulation continues behind the price. If the positive flow persists, TAO could target the $450 altitude before another correction.

Frequently Asked Questions

Why did TAO’s open interest drop so sharply on the 16th of October?

The open interest fell primarily because a $48 million net outflow of futures contracts reduced the total available exposure. This created a liquidity vacuum that widened sell demand and propped the price lower by 15 % in a single day.

What does a positive funding rate tell me about TAO’s future?

When the funding rate flips positive, it means long‑position holders are paying the short side. Traders often interpret this as an expectation of near‑term upticks, as it shows demand is outmatching supply in the derivatives market.

Key Takeaways

• Derivative Control: Substantial outflows can collapse open interest and prompt heavy liquidation.
• Spot Support: $13.7 million of spot inflows within a short period signals buyer confidence.
• Look for MFI > 50: A bullish MFI, coupled with a rising A/D line, may herald a price rally if liquidity remains anchored.

Conclusion

The TAO market is a study in contrasts: derivative walls are eroding while spot traders seek bargains. Monitoring open interest trends, spot net flows, and liquidity ratios such as the MFI will be essential for sizing positions accurately. While the current data hints at a rebound, trading volumes and funding rates should be watched closely to time any move on the $450 horizon.

Published and updated on 17 October 2025 by COINOTAG – your trusted source for 24/7 crypto market analysis.

Sources: CoinGlass, TradingView. All data recorded on 16 October 2025. For further charts and analytics, visit TAO market data.