Bittensor ( TAO ) big dump of 15% behind: $48 million outflow severely hit derivation, Spot buyers quietly hoarding $13.7 million

Bittensor (TAO) saw its price plummet by 15% within 24 hours after news emerged that Grayscale was considering listing the asset, dropping to around $370 at its lowest. This correction reflects the market's repricing of TAO's value, but it has also attracted traders looking to accumulate. The derivation market saw outflows of over $48 million, reducing open contracts to $270 million, which was a major driver of the price drop. However, spot investors quietly accumulated $13.7 million worth of TAO between October 14 and 16, and technical indicators also suggest a potential rebound in the short term.

Derivation market under pressure: 48 million USD capital outflow breaks TAO upward trend

(Source: CoinGlass)

The significant Close Position of derivation positions is the primary reason for the inability of TAO prices to maintain their upward momentum and the occurrence of a sharp correction.

· Significant decrease in open contracts: According to CoinGlass data, over 48 million dollars exited derivation positions, causing open interest to drop from a peak of around 340 million dollars to about 270 million dollars.

· Short positions dominate the futures market: the overall derivation trading volume ratio has fallen to around 0.90, indicating that sellers still hold a dominant position in the futures market.

· Short-term risk: This market condition historically coincides with long-term price correction periods, and if the liquidation cluster expands, the TAO price is likely to face further downward pressure.

Spot buyers continue to accumulate: $13.7 million in funds entering to buy the dip

In stark contrast to the panic in the derivation market, spot investors view this price drop as an accumulation opportunity, demonstrating confidence in the long-term strength of TAO.

· A continuous buying spree for three days: From October 14 to 16, the Spot addresses accumulated approximately 13.7 million dollars worth of TAO, forming a three-day buying momentum.

· Major CEXs leaning bullish: CoinGlass data shows that major CEXs maintain a positive trading volume ratio for TAO, indicating that traders on these platforms remain bullish despite facing selling pressure in the market.

· Positive funding rate: The Open Interest Weighted Funding Rate for unclosed contracts has turned positive, which means that holders of long positions are paying funding fees. This setup is usually associated with expectations of a short-term price rebound.

Technical indicator shows bullish signal: MFI is above 50

(Source: TradingView)

The analysis of technical indicators suggests that TAO may experience a rebound, and the accumulation of Spot is providing momentum for the price increase.

· Money Flow Index (MFI): MFI has entered the bullish zone above 50, a zone that typically indicates strong price momentum.

· Accumulation/Distribution Line (A/D): The A/D line shows an upward trend, indicating that despite the price cooling off, accumulation is still taking place.

· Rebound Target: If these indicators maintain an upward trend, TAO is expected to regain momentum and move towards the $450 area. However, continued capital outflow or another washout in the derivation market could offset this short-term bullish setup.

Conclusion

The recent 15% fall of TAO is the result of the rapid release of excessive speculative sentiment in the derivation market. Although the outflow of derivation has created significant downward pressure in the short term, the continuous accumulation by spot investors and the bullish signals from key technical indicators provide hope for a short-term recovery of TAO. Against the backdrop of Grayscale considering its listing, market confidence in TAO's long-term potential remains strong. Investors need to closely monitor changes in liquidity in the derivation market to assess whether the price accumulation is sufficient to support a return to $450.

This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions with caution.