TAO Market Commentary: Critical Support Test in the Downtrend on January 23, 2026

TAO continues to face pressure at the 238.80 dollar level, with a clear downtrend dominating the daily chart. RSI has declined to 39.86, approaching the oversold region, and testing the critical support at 236.27 dollars could increase volatility in the market – if this level breaks, deeper corrections may come into play.

Market Outlook and Current Situation

TAO fell to 238.80 dollars, experiencing a 1.69% loss in the last 24 hours, and is stuck in the 235.20-243.20 dollar range. Daily trading volume came in at 89.52 million dollars, indicating that the downtrend is not supported by volume; however, the weak overall market sentiment signals that buyers have not yet entered. TAO, focused on the Bittensor ecosystem, appears to be in Bitcoin's shadow despite the AI narrative, trading below the short-term EMA20 (258.46 dollars) and giving bearish signals.

Looking at multi-timeframe (MTF) confluence, we detect a total of 11 strong levels across the 1D, 3D, and 1W charts: 2 supports/2 resistances on 1D, 1 support/2 resistances on 3D, and 2 supports/4 resistances on 1W. This distribution confirms that the medium-term trend is under downward pressure. While the decrease in volume suggests the decline is starting to lose momentum, the Supertrend indicator's bearish signal (291.15 dollar resistance) prevents any rally. Investors can follow detailed price movements via TAO Spot Analysis.

The weakness in altcoins across the market is also affecting TAO; the narrowing of the 24-hour range can be interpreted as a breather before consolidation. However, the downward trend indicates that speculative buying will remain limited. Volume increase in upcoming sessions will be direction-determining.

Technical Analysis: Levels to Watch

Support Zones

The nearest support zone is at 236.2667 dollars (score: 66/100), positioned near the 24-hour low and forming a strong base in MTF confluence. If it falls below this level, the next critical support at 206.3000 dollars (score: 63/100) will come into play; this zone overlaps with the Fibonacci retracement on the weekly chart, increasing the risk of a deep pullback. According to historical data, these supports have previously seen 20-30% rebounds, but under the current downtrend, the likelihood of a break is high.

Resistance Barriers

The first resistance is at 248.5833 dollars (score: 71/100), close to the EMA20, potentially limiting short-term rallies. Higher up, 333.8014 dollars (score: 62/100) forms a strong barrier; this level coincides with the Supertrend resistance on the 1W chart. In a bullish scenario, breaking these resistances could bring targets above 350 dollars into play, but the current momentum does not support this. For futures trading, I recommend reviewing the TAO Futures Analysis.

Momentum Indicators and Trend Strength

RSI is hovering in the neutral-bearish zone at 39.86; while approaching oversold (30) carries short-term rebound potential, the lack of divergence delays trend reversal. The MACD indicator confirms the bearish crossover with a negative histogram, continuing below the signal line. As long as the price remains below EMA20 in the EMA hierarchy, short-term bearish bias dominates; EMA50 (around 270 dollars) will determine the medium-term trend.

Supertrend gives a bearish signal, while ADX (average directional index) around 25 shows medium trend strength – this increases sensitivity to sudden breaks. In MTF, the bearish MACD on the 3D chart aligns with the descending channel on 1W; overall trend strength is downward, but declining volume could open the door to a rally. Indicators point to a momentum surge after support testing.

Risk Assessment and Trading Outlook

Bullish target at 333.8014 dollars (score: 52) offers 40% upside from current levels, while bearish target at 115.6968 dollars (score: 22) carries 50% downside risk – risk/reward ratio around 1:0.75 is balanced but disadvantaged by the downtrend. Volatility is high; if the 236.27 dollar support holds, short-covering could be triggered, but a break would lead to a quick slide to 206 dollars. For positions, set stop-losses below supports and take-profits at resistances.

Overall outlook is cautious: With the downtrend continuing, BTC correlation is critical. Long positions are risky without volume increase; shorts should focus on support breaks. In a market rally, TAO has potential to stand out with its AI narrative, but current data maintains seller dominance. Balanced portfolio management is essential.

Bitcoin Correlation

Bitcoin is sustaining its downtrend with a 0.84% decline at the 89,256 dollar level; Supertrend's bearish signal is a red alert for altcoins. TAO shows high correlation with BTC (%0.85+), so if BTC supports (88,426, 86,646, 84,681 dollars) break, it will face pressure. If BTC resistances (90,370, 92,306, 94,276 dollars) are overcome, a relief rally in TAO is possible, but current BTC weakness is leading TAO to test the 236 dollar support. Rising BTC dominance in altcoins marginalizes projects like TAO.