Bittensor's token TAO rebounded after holding above $255, rising as high as $289 during the session before slightly retreating. At the time of writing, TAO was trading at $283, up 10.25% on the day. Trading volume rose to $250 million during the same period, indicating a recovery in market participation.
Derivatives trading rebounds
This rebound was mainly accompanied by increased activity in the derivatives market. Data shows that open interest in TAO contracts increased to $365 million, a 9.2% increase within the day; derivatives trading volume rose to $946 million, an increase of 48.3%.
A simultaneous increase in open interest and trading volume typically indicates that more funds are opening new positions, reflecting a recovery in short-term trading demand. This also propelled TAO's rapid recovery from its previous decline.
- Open interest: $365 million
- Derivatives trading volume: $946 million
- Spot trading volume: US$250 million
Net inflows into exchanges remain high
However, the price rebound did not completely reverse the selling pressure. The article mentions that TAO has seen net inflows into exchanges for two consecutive days, indicating that some holders chose to realize profits during the rebound.
On May 21, net spot inflows totaled $1.54 million, lower than the previous day's $3.65 million, but still within positive territory. For the market, sustained net inflows typically indicate that shares are flowing to trading platforms, suggesting that short-term selling pressure has not yet subsided.
The short-term bulls and bears are still locked in a tug-of-war.
From a technical momentum perspective, the Relative Strength Index (RSI) of TAO has risen to around 50, returning to the neutral zone, indicating some recovery from the previous weakness. However, the article also points out that the signal line is still above the RSI, showing that sellers are still more active than buyers.
Another indicator of buying and selling pressure also shows that sellers still have the upper hand. The relative volatility of buying pressure has fallen to 43, while the relative volatility of selling pressure has risen to 56, indicating that there is still strong profit-taking demand during the rebound, and the short-term trend is not stable.
If profit-taking continues in the spot market, TAO may fall back again and retest the area below $260, with $255 remaining the main support level. If activity in the futures market remains and funds continue to flow in, TAO is expected to stabilize above $280 and attempt to retest $300.
