The price of Bittensor took a sharp hit, dropping around 17% in just a few hours after a major fallout within its own ecosystem rattled investor confidence.
The trigger was unexpected. Covenant AI—one of the most prominent teams building on Bittensor—announced it was stepping away from the project entirely.
This isn’t just any developer exit. Covenant AI is behind the Covenant-72B model, often described as one of the largest decentralized AI training efforts to date. That gave it serious weight within the ecosystem.
In a strongly worded statement, founder Sam Dare accused Bittensor’s leadership of going against the very principles that attracted builders in the first place. He claimed that the network’s decentralization narrative had broken down, alleging that co-founder Jacob Steeves exerted centralized control over their subnet once it became too influential.
So far, there’s been no public response from Steeves—and that silence has only added to the uncertainty.
The timing couldn’t be worse. TAO had been on a strong run, climbing roughly 140% over six weeks, with most of that momentum building since early March. Much of that rally was tied to the success story around Covenant-72B, along with growing institutional interest following moves like Grayscale exploring a TAO-related trust product.
Now, that narrative has taken a serious hit.
Can TAO bounce back?
At the moment, TAO is trading near $280—and technically, that’s a fragile place to be.
The $300 level had been acting as key support, but the price has now slipped below it. Once a level like that breaks, it often flips into resistance, making any recovery more difficult.
There were already warning signs before the news dropped. TAO had been rejected near $360 earlier in April, and momentum indicators had started to turn bearish, suggesting sellers were quietly stepping in ahead of the headlines.
On-chain data backs up the severity of the move. The drop ranks among the steepest seen recently across large-cap AI tokens. At the same time, social buzz around TAO had surged to a one-year high—but sentiment wasn’t as strong as it looked. For every positive comment, there were noticeably more negative ones, hinting that confidence in the rally may have been shaky underneath.
From here, the next moves are pretty clear.
If TAO can reclaim $300 quickly—ideally within the next couple of days—and if there’s a credible response from leadership, a bounce toward the $320–$330 range isn’t off the table.
But if the silence continues, or if more developers start to leave, the pressure could build further. In that case, a drop toward $250 or lower becomes a real possibility.
History suggests that when ecosystems take a hit like this from internal conflict, recovery tends to be slow. It’s rarely a quick bounce—it’s more often a drawn-out rebuild.
Right now, $300 is the level to watch.
Where capital is moving next
Events like this tend to trigger quick shifts in the market.
When a project’s core promise—especially something as important as decentralization—is publicly questioned by one of its top contributors, traders don’t usually wait around for clarity. They move.
Some of that attention is starting to drift toward newer infrastructure plays, including projects like Bitcoin Hyper ($HYPER).
The idea behind it is straightforward: combine Bitcoin’s security and liquidity with faster execution and smart contract functionality using the Solana Virtual Machine. In simple terms, it’s trying to solve Bitcoin’s usual limitations—slow speeds, higher fees, and limited programmability.
Unlike ecosystems that rely heavily on internal governance structures, the pitch here leans more on architecture than coordination.
The project is still early, but it has already raised around $32 million in its presale, with the token priced at $0.0136. There’s also staking available for early participants, and its bridge system is designed to handle native BTC transfers while staying anchored to Bitcoin’s base layer.
