Bittensor (TAO) Price: Token Plunges 30% After Subnet Operator Accuses Co-Founder Of Controlling The Protocol

TLDR

• Covenant AI publicly withdrew from Bittensor on April 8, alleging co-founder Jacob Steeves maintained centralized control.
• TAO experienced a decline of approximately 25–30% from its weekly peak, moving from $337 to roughly $249–$253.
• More than $650 million in market capitalization was lost, alongside $9.1 million in long position liquidations.
• Trading activity escalated to $1.72 billion on April 10, significantly higher than the $500 million average observed earlier in the month.
• Technical assessments suggest a possible additional drop of 25–45% towards the $144–$230 price bracket.

(SeaPRwire) –   TAO, the proprietary token of the Bittensor protocol, saw a significant decline this week following a public release of serious accusations by one of its leading subnet operators against the project’s co-founder.

Covenant AI declared its complete withdrawal from the Bittensor ecosystem on April 8. Its founder, Sam Dare, subsequently issued a comprehensive statement two days later, detailing the rationale behind the exit.

Dare claimed that co-founder Jacob Steeves has retained centralized authority over the protocol. This assertion directly conflicts with Bittensor’s fundamental premise as an open, decentralized AI network where subnets are meant to compete fairly.

The accusations encompass claims that Steeves independently halted a subnet’s emissions, disregarded the authority of subnet owners within their respective community forums, and discontinued projects without adhering to predefined procedures.

Unfavorable news within the $TAO ecosystem, as a major subnet has opted to abandon its token and depart the ecosystem.

This highlights both the advantages and disadvantages of permissionless ecosystems, where founders and protocols possess the freedom to enter and exit at will.… https://t.co/hZefaQb6w

— Michaël van de Poppe (@CryptoMichNL) April 10, 2026

More significantly, Dare asserted that Steeves employed substantial, public token sales as “punitive” measures to enforce compliance during operational disputes. “These were not governance choices arrived at through open agreement,” Dare stated. “They were actions executed by a single individual who never surrendered authority.”

Dare further claimed that other members of the project’s leadership triumvirate primarily function as “legal protections,” allowing Steeves to remain shielded from repercussions.

Market Reaction

TAO declined by approximately 25% within six hours of the announcement, falling from $337 to $253. This sharp drop eliminated over $650 million from its market capitalization, reducing it to $2.57 billion.

Sam Dare offloaded 37,000 TAO onto his own subnet holders.

Approximately $10 million. In two transactions. Following public accusations of Bittensor’s centralization.

He then departed.

This represents the Covenant AI exit, the full narrative of which is not being widely shared.

The context. Sam Dare manages Covenant… pic.twitter.com/F5cuo5dSan

— Jesus Martinez (@JesusMartinez) April 10, 2026

Trading activity surged to $1.72 billion on April 10, significantly surpassing the $500 million average observed earlier in the month. The sell-off coincided with an approximate 250% increase in volume, indicating widespread market involvement in the downward trend.

Within the futures market, $9.1 million worth of long positions were liquidated, contributing to a total of $9.71 million in liquidations impacting bullish traders. Numerous traders with long holdings found themselves in unfavorable positions, intensifying the forced selling pressure.

TAO has experienced a minor recovery since then but is still down 12.8% over the last week. It maintains a 37% increase over the past month.

Technical Picture

TAO is presently stabilizing within the 0.382–0.5 Fibonacci retracement band. In November 2025, a breach below this identical area resulted in a decline exceeding 30%. A comparable trend in June 2025 showed TAO finding stability around the 0.618 Fib level prior to a rebound.

$TAO is expected to retest the previously lost support levels, which now serve as resistance.

$283 + $294 are the zones of interest I am monitoring for this test.

Should the price manage to break back through and reclaim that red support area, then the liquidity at these “inexpensive” levels could act as a catalyst… https://t.co/1eTOzTitGB pic.twitter.com/mhlKr3dTi3

— Ardi (@ArdiNSC) April 10, 2026

Price Targets

Should the June 2025 trend recur, TAO might fall to the 0.618 Fib support around $230. If the November 2025 fractal unfolds, the 1.0 Fib target is positioned near $144, approximately 45% below its current valuation.

Trading volume on April 10 reached $1.72 billion, marking its peak for the month to date.