TAO is down roughly 12% on the week, and while the short-term price action looks uncomfortable, a Wyckoff-oriented view suggests this move may be part of a much larger structure rather than a breakdown.
In a recent market session, a Wyckoff-focused analyst walked through TAO’s weekly and daily charts, explaining where the asset currently sits in its broader accumulation cycle and what signals actually matter from here.
This article breaks down the key takeaways.
The Bigger Picture: Still in an Accumulation Test Phase
On the weekly chart, TAO is still firmly inside what Wyckoff theory calls an accumulation cycle.
This phase is designed to do one thing: separate weak hands from strong hands.
After establishing the trading range top of the accumulation structure, price previously experienced an automatic rally, a rebound driven by relief buying after panic selling. For TAO, that rally topped out near the $286 key level.
Since then, price action has followed a familiar Wyckoff pattern:
- A rally toward resistance
- Followed by multiple retests lower, often below the original panic low
This is not unusual. Historically, second and even third tests during accumulation often dip below the initial panic level before the structure resolves.
Historical Context: Why Lower Tests Are Not a Shock
Looking back at prior TAO cycles, especially during summer 2024 and early 2025, the same behavior played out:
- Panic selling pushed price down
- The first rebound closed higher
- Subsequent tests dropped lower than the initial panic low
In this case, the current decline below the $219 red key level aligns with that historical pattern. Importantly, price is now hovering near what the analyst refers to as the long-term playground bottom, a zone that has repeatedly acted as structural support in past cycles.
In short: This weakness is not unexpected for anyone tracking Wyckoff structures over time.
What Actually Signals Strength From Here
At this stage of accumulation, price alone is not enough. The real confirmation comes from volume.
The key signal to watch is what Wyckoff calls a Sign of Strength:
- Price advancing toward resistance
- Accompanied by above-average volume
- Visible through strong white candlesticks and expanding volume bars
For TAO, this would likely involve:
- A renewed move toward the $286 level
- With volume that clearly exceeds recent averages
Without volume, price bounces are just noise.
Zooming In: Daily Chart and Near-Term Scenarios
On the daily timeframe, TAO is trading inside a developing downtrend channel. While the structure is still early and may adjust, it provides useful short-term reference points.
There are two key dates where clarity is expected.
First Decision Point: February 3
If price moves back into the downtrend triangle over the next couple of days:
- A rejection from the channel ceiling would confirm continued downside pressure
- A break above the ceiling would open the door to sideways or modest upside action
Given the broader market narrative, sideways consolidation would already be a positive outcome.
Second Decision Point: Around February 12
If price drifts sideways but fails to break higher:
- Another rejection near mid-February could send TAO lower
- The next major support sits near $183
- A failure there opens the path toward $140
That timeline would place any deeper test just ahead of March.
The Risk Case: Why $140 Still Matters
The analyst pointed to October 10 as a reminder of how quickly downside can accelerate when key levels fail. While TAO has not revisited those extremes recently, history shows that such moves are not theoretical.
This is not a prediction, but a risk boundary traders should remain aware of.
Bottom Line
TAO’s recent drop looks alarming on the surface, but under a Wyckoff framework:
- The market is still inside an accumulation process
- Multiple lower tests are normal at this stage
- Real confirmation requires price strength with volume, not just rebounds
Until a clear Sign of Strength appears, patience matters more than predictions.
The next few weeks, especially early and mid-February, should provide clearer answers about whether this structure resolves higher or continues testing lower levels.
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