Key Highlights
- Covenant AI publicly departed Bittensor on April 8, raising concerns about co-founder Jacob Steeves’ centralized governance
- The token experienced a sharp decline of approximately 25–30% from weekly peaks, sliding from $337 down to the $249–$253 range
- Market capitalization contracted by over $650 million, while futures traders saw $9.1 million in forced long liquidations
- Daily trading activity on April 10 reached $1.72 billion, significantly exceeding the month’s typical $500 million average
- Chart patterns suggest possible continuation toward the $144–$230 support zone, representing 25–45% additional downside
The Bittensor protocol’s native token TAO experienced significant downward pressure this week following public accusations from a prominent subnet operator regarding the project’s governance structure.
Covenant AI publicly disclosed its complete withdrawal from the Bittensor ecosystem on April 8. Two days later, founder Sam Dare released an extensive statement explaining the rationale behind this strategic decision.
Dare’s statement included accusations that co-founder Jacob Steeves exercises centralized authority over protocol operations. These claims challenge Bittensor’s fundamental value proposition as a decentralized artificial intelligence network where subnet operators can function independently and competitively.
The specific concerns raised by Dare include allegations that Steeves unilaterally halted emission distributions to a subnet, bypassed subnet owner authority in community governance spaces, and removed projects without adhering to established procedural frameworks.
Dare’s most significant allegation centered on claims that Steeves employed substantial, public token disposals as “punitive” mechanisms to enforce compliance during operational disputes. “These were not governance decisions made through transparent consensus,” Dare stated. “They were actions taken by one man who never relinquished control.”
Dare further suggested that other members of the project’s leadership triumvirate function primarily as “legal shields” while Steeves operates with limited accountability.
Market Response
TAO experienced approximately 25% depreciation within six hours following the announcement, declining from $337 to $253. The downturn eliminated over $650 million in market capitalization, reducing the total to $2.57 billion.
Daily trading activity surged to $1.72 billion on April 10, substantially higher than the $500 million daily average observed during the month’s earlier period. The sell-off coincided with roughly 250% volume expansion, indicating widespread market participation in the downward movement.
Derivatives markets saw $9.1 million in long position liquidations, with bullish traders absorbing $9.71 million in total forced closures. Numerous traders maintaining optimistic positions faced unexpected losses, intensifying downward momentum through forced selling.
TAO has achieved modest recovery since the initial decline but continues trading 12.8% lower over the seven-day period. The token maintains a 37% gain over the previous 30 days.
Chart Analysis
TAO is presently consolidating within the 0.382–0.5 Fibonacci retracement zone. During November 2025, a breakdown from this identical range resulted in depreciation exceeding 30%. A comparable formation in June 2025 showed TAO finding stability near the 0.618 Fib level before recovering.
Potential Support Levels
Should the June 2025 formation repeat, TAO may decline toward the 0.618 Fib support around $230. Should the November 2025 pattern materialize, the 1.0 Fib target positions near $144, representing roughly 45% below present valuation.
Daily trading volume on April 10 registered $1.72 billion, marking the highest level recorded this month.
