TAO eyes breakout above $377 as bullish momentum builds

The market conditions have been choppy in recent weeks, with Bitcoin bouncing between $65,000 and $72,000.

However, TAO, the native coin of the Bittensor project, has been one of the steady performers during that period. 

TAO is currently trading at $341 on Wednesday after surging by nearly 10% so far this week.

Improving sentiment across the derivatives market supports a bullish outlook for TAO, while technical analysis suggests a continuation of the bullish trend, aiming for levels above $400 in the upcoming days.

TAO rallies as derivatives data support a bullish bias

TAO is up by 9% in the last 24 hours and is now trading at $341 per coin.

The rally comes amid improved retail demand for the coin.

Data obtained from CoinGlass shows that TAO’s futures Open Interest (OI) reached a record high of $554.98 million on March 26 and, despite a slight pullback, remains on an upward trajectory, standing at $413.65 million as of Wednesday.

The surging OI indicates new or additional money entering the market and new buying, which could fuel a second leg higher in the TAO price.

Additionally, TAO’s funding rate flipped positive on Tuesday and stands at 0.008% on Wednesday, indicating that longs are paying shorts.

Usually, when funding rates turn positive, TAO’s price has significantly increased. 

In addition to the bullish derivatives data, market sentiment also supports a risk-on stance amid easing geopolitical tensions between the US and Iran.

The announcement of a two-week ceasefire could further fuel TAO’s upward momentum.

TAO bulls aim for levels above $400

The TAO/USD 4-hour chart is one of the most bullish among the top 30 cryptocurrencies by market cap.

The near-term bias for this coin remains extremely bullish as TAO holds well above the 50-day, 100-day, and 200-day Exponential Moving Averages near $258-$275.

The strong support around these levels keeps the broader uptrend intact despite the recent pullback from the $377 area. 

The momentum indicators also show that TAO could be preparing for another leg up over the coming hours or days. 

The Relative Strength Index (RSI) on the 4-hour chart at 70 stays in positive territory without showing outright overbought stress.

Meanwhile, the Moving Average Convergence Divergence (MACD) line climbs toward the signal line above zero, suggesting fading bearish pressure after the correction.

If the $377 resistance level holds, TAO’s price could slip lower in the near term and could retest the immediate support at $298, which roughly aligns with the 38.2% Fibonacci retracement at $294, measured from the $142 low to the $539 high.

Currently, TAO is trading at $341, which aligns with the 50% FIB retracement.

If the daily candle closes above this level, TAO could retest the $377 swing high before rallying towards the $388 resistance zone. 

An extended bullish scenario would pave the way for TAO to hit the $400 psychological mark for the first time in 2026.