Key Takeaways
- Covenant AI made a public departure from Bittensor on April 8, claiming co-founder Jacob Steeves exercises centralized authority
- TAO experienced a ~25–30% decline from weekly peaks, sliding from $337 down to approximately $249–$253
- More than $650 million in market capitalization evaporated, accompanied by $9.1 million in liquidated long positions
- Daily trading volume exploded to $1.72 billion on April 10, compared to roughly $500 million earlier in the month
- Chart patterns suggest TAO could face an additional 25–45% correction toward the $144–$230 zone
The Bittensor protocol’s native cryptocurrency experienced a severe downturn this week following explosive public accusations from a prominent subnet operator targeting the project’s co-founder.
Covenant AI made public its complete withdrawal from the Bittensor network on April 8. Two days following the initial announcement, founder Sam Dare released an extensive statement outlining the reasoning behind this strategic exit.
Dare’s statement accused co-founder Jacob Steeves of maintaining unilateral authority over the protocol. These claims stand in stark opposition to Bittensor’s fundamental value proposition as a decentralized, open AI network where independent subnets operate on a level playing field.
The accusations encompass claims that Steeves single-handedly halted a subnet’s emissions, bypassed subnet owners’ decision-making power in their own governance channels, and eliminated projects without adhering to established protocol procedures.
Very poor news in the $TAO ecosystem, as one of the largest subnets has decided to rugpull their own token and leave the ecosystem.
The upside and downside of permissionless ecosystems, through which founders and protocols are free to leave and join whenever they can.… https://t.co/hZefa4Qb6w
— Michaël van de Poppe (@CryptoMichNL) April 10, 2026
Perhaps most damaging, Dare claimed that Steeves weaponized substantial, public-facing 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 claimed that other members of the project’s leadership triumvirate function primarily as “legal shields” while Steeves operates with impunity from accountability.
Market Response
TAO plummeted approximately 25% within a six-hour window following the announcement, cascading from $337 to $253. The dramatic selloff eliminated more than $650 million in market capitalization, reducing it to $2.57 billion.
Sam Dare just dumped 37,000 TAO on his own subnet holders.
Roughly $10 million. In two clips. After publicly accusing Bittensor of being centralized.
Then he walked.
This is the Covenant AI exit nobody is telling you the full story about.
The setup.
Sam Dare runs Covenant… pic.twitter.com/F5cuo5dSan
— Jesus Martinez (@JesusMartinez) April 10, 2026
Daily trading volume surged to $1.72 billion on April 10, significantly exceeding the $500 million average recorded in early April. The selloff coincided with an approximately 250% surge in volume, indicating widespread market engagement in the downward movement.
Within derivatives markets, $9.1 million worth of long positions faced liquidation, with $9.71 million in total liquidations impacting bullish speculators. Numerous traders maintaining bullish positions were overwhelmed, intensifying the forced selling dynamic.
TAO has experienced a modest recovery since but continues trading down 12.8% across the past week. The token maintains a 37% gain over the trailing 30-day period.
Chart Analysis
TAO is presently ranging within the 0.382–0.5 Fibonacci retracement zone. In November 2025, a breakdown from this identical area resulted in a decline exceeding 30%. A comparable formation in June 2025 witnessed TAO finding stability around the 0.618 Fib level before recovering.
$TAO will get a retest of the lost support levels which now act as resistance.
$283 + $294 are the areas of interest I'm watching for the test.
If price can rip back through and reclaim that red support zone, then the liquidity at these "cheap" levels would function as a spring… https://t.co/1eTOzTitGB pic.twitter.com/mhlKr3dTi3
— Ardi (@ArdiNSC) April 10, 2026
Downside Projections
Should the June 2025 formation repeat, TAO could retreat to the 0.618 Fib support zone around $230. If the November 2025 pattern emerges, the 1.0 Fib objective lies near $144, representing approximately 45% below present price levels.
Trading volume on April 10 reached $1.72 billion, marking its peak level for the month to date.
