TAO Retests $390 Support at Flag Base With 50EMA and Neckline Forming Bullish Pivot

TAO is compressing inside a descending flag with $390 as key support and $470 resistance tightening near the upper trendline.

Price remains above the $395 neckline and rising 50EMA, with buyers defending the $385–$395 demand pocket on repeated tests.

TAO’s current structure mirrors a classic breakout retest, with $390 acting as a pivot that may trigger renewed upside momentum.

Bittensor's TAO token has entered a decisive technical phase following weeks of corrective drift. Price behavior now rests near the lower edge of a key descending flag formation, with short-term volatility intensifying.

Technical Breakdown Points to Measure Continuation

TAO is consolidating after a sharp rally, forming a well-defined descending channel on the daily timeframe. Strong support is evident near $390, while resistance tightens near $470. Chart structure, moving averages, and neckline positioning suggest a high-stakes inflection zone is forming.

Source: Post on X

After the breakout phase from mid-April's bottom near $240, price action surged over 100% to reach above $480. The market then rotated into a measured pullback, tracing a textbook descending flag. The upper trendline now compresses bullish movement near $470, while the lower edge tests buyers around $390. The $403.3 daily close held within this compression, confirming that both buyers and sellers remain active in the zone. Price wick behavior has respected both trendlines, maintaining flag structure integrity.

Assessing the Heikin Ashi candles, the dominant red tone underscores persistent selling pressure inside the flag. Despite that, wicks near $380 have repeatedly rejected downside pushes, suggesting defending bulls remain present. Structurally, the trendline support has been tested without failure. Range compression here often signals a volatility breakout ahead.

The chart also reflects a prior neckline around $395, dating back to the early-May surge. Price holding just above this level overlaps with the rising 50-day EMA, adding to the support confluence. This zone, $385–$395, has become a clear demand pocket. Daily closes remain perched above the neckline, reinforcing that bullish structure still holds despite the recent 5.58% drop.

Breakout Retest Zone Creates Momentum Watch Area

TAO now faces a high-probability retest setup that may define its next leg. Whether price maintains footing above $390 could dictate the timing and strength of any upside continuation.

The neckline region now serves as a structural pivot that historically flipped from resistance to support

It aligns closely with the 50-day EMA, currently sloping upward through $385. The broader inverse head and shoulders formation built over Q1 still shows validity. Left shoulder near $265, head near $195, and right shoulder around $310 suggest a base pattern targeting levels as high as $600 under measured move analysis.

Source: Post on X

The immediate compression near $390 presents two scenarios. If the level holds, structure remains intact with potential for renewed momentum. A breakdown below $385, however, could refocus the $360 area as downside risk. Short-term sentiment shows no volume spikes, but wick activity and EMA alignment confirm strong market engagement. The current candle cluster reflects a pause before resolution.

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