Covenant AI' Subnet Exodus Triggers Price Collapse

• • Technically, TAO's daily and 1-hour charts printed a freefall structure that broke through its structural support zone.
• • Fundamentally on April 10, 2026, the departure of a major subnet operator (Covenant AI) over centralization issues triggered a panic selloff of up to 9%.

The decentralization narrative for this AI protocol took a severe fundamental blow today. Covenant AI, one of the most crucial subnet operators in the ecosystem, announced its official exit, hurling sharp accusations that the network's governance is unilaterally controlled by its founder (Jacob Steeves). These centralization accusations are deadly poison for a decentralized AI project, instantly triggering a loss of confidence (FUD). Technically on the 1-hour (1H) and daily (1D) charts, the market reaction is brutal; TAO's price plummeted sharply from its upper area and tore through crucial equilibrium levels, now resting weakly at $263.6 with no buyer resistance. Given the institutional trauma from this internal governance conflict, selling pressure is projected to continue pushing the price down to seek a new liquidity base in the $240.0 to $250.0 demand zone over the next 5 days.

TAO's sharply corrected valuation could tempt short-term speculators to buy the dip. If the core development team quickly releases a crisis mitigation statement, the price could technically bounce back toward the nearest resistance at $272.0.