TAO is having a rough day, with the price sliding after losing an important support level. The timing has surprised some traders, especially since the drop comes shortly after TAO’s first halving. While halvings are usually seen as positive in the long run, the short-term reaction has gone the other way.

Right now, the TAO price is trading around the $220 area after breaking below $228, a level that had held the price up in recent sessions. Once that support gave way, selling pressure picked up. 

This move is not about one single event but a mix of post-halving dynamics, technical weakness, and a broader pullback across the AI crypto sector.

The TAO halving took place on Dec 14, cutting daily token issuance from 7,200 to 3,600. Over time, this should tighten supply and help price. In the short term, though, miners often sell part of their holdings to offset lower rewards.

This behavior is common after halving events, and the TAO price appears to be following that pattern. Trading volume over the past 24 hours is down about 7.46%, which points more toward steady distribution than panic selling. While this kind of pressure usually fades, it can keep the price under pressure for a while.

From a chart perspective, the break below $228 changed the short-term picture. Once that level failed, traders quickly stepped aside, which added to the downside move. 

Momentum indicators are backing this up. The 14-day RSI is sitting near 32.2, close to oversold territory, while the MACD histogram remains firmly negative at -4.61.

With $228 now acting as resistance, the next area traders are watching is the 2025 low near $183. On the flip side, a move back above $228 would be an early sign that selling pressure is starting to cool.

TAO is also moving in line with the broader AI crypto space, which has been underperforming recently. The sector is down around 7.3% over the past week, and sentiment has taken a hit following renewed discussions around regulatory risks for decentralized AI projects.

As a result, TAO’s market ranking has slipped to around #36. Still, the project has longer-term positives in place, including institutional exposure through products like Nasdaq’s VIRTAO ETP, which could matter once market conditions improve.

Read Also: Whales Are Still Selling Bitcoin: A Warning Sign for BTC Price

For now, the TAO price action is being driven by short-term factors rather than changes to its core story. Miner selling, a clear technical breakdown, and weak sector sentiment are all working against it.

The big question is whether TAO can hold above $200 or if the price drifts toward the $183 support area. As usual, Bitcoin’s next move will play a role. If the broader market finds its footing, oversold AI tokens like TAO could see relief. Until then, the short-term tone remains cautious.

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