Will TAO Price Crash Deeper as Biggest Subnet Covenant AI Exits Bittensor?

Bittensor’s TAO token crashes more than 18% in just a few hours, erasing its recent 100% rally. The sharp drop follows a dramatic exit from Bittensor by Covenant AI, the biggest operator of several high-emission subnets, over centralization concerns.

Covenant AI Leaves Bittensor and Accuses Founder of Centralized Control

Covenant AI, owner of SN3, SN81 & SN39 subnets has announced its exit from Bittensor, according to an official statement on April 10. Covenant AI founder Sam Dare accuses Bittensor founder Jacob Steeves of controlling the network, quoting the governance as “decentralization theatre.”

It claims Steeves suspended emissions to Covenant’s subnets, stripped their moderation rights over their own community channels, deprecated their subnets, dumped large token sales, and operates a “triumvirate” network structure.

“Jacob Steeves maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus,” said Dare.

Notably, decentralized, permissionless AI training is not a Bittensor feature. Covenant AI tests decentralized LLM models. Nvidia CEO Jensen Huang endorsed Bittensor after the network’s successful decentralized training of a 72B parameter model (Covenant-72B) across distributed nodes. TAO price saw a massive 90% rally following Nvidia CEO and Anthropic co-founder Jack Clark’s comments.

Covenant AI founder Sam Dare has sold all of his subnet holdings, effectively rugging Bittensor. He held more than 37,000 TAO tokens in this wallet.

Will TAO Price Crash More Ahead?

TAO price crashed 18% in the past 24 hours, currently trading near $263. The 24-hour low and high are $262.51 and $341, respectively. Trading volume has increased by 156% over the last 24 hours as investors moved to book profits.

Popular analyst Cheds Trading pointed out that TAO price risks a deeper crash below the 200-day moving average (DMA), following a recent more than 100% Bittensor rally. It has tumbled below the 200-DMA and is moving towards the 50-DMA at $250. Whereas, the Relative Strength Index (RSI) drops to 41, signaling potential for further downside move.

CoinGlass data showed mixed sentiment in the derivatives market. At the time of writing, the total Bittensor futures open interest fell nearly 1% to $392.59 million in an hour. TAO futures OI is tanking massively on OKX, Gate, Bitget, Hyperliquid, and LBank. However, leading exchanges such as Binance and Bybit are yet to witness a correction.