Covenant AI Says TAO Crypto is Not Decentralized: Bittensor Drops -18%

Bittensor’s governance facade cracked publicly this week, and the market responded immediately. TAO is trading around $255-270, down roughly 19% in 24 hours, after a prominent subnet developer accused the network’s co-founder of exercising unchecked control over its supposedly decentralized infrastructure. The full implications for TAO crypto valuation are still unfolding.

Covenant AI, one of Bittensor’s most high-profile subnet developers, announced Thursday it is departing the ecosystem entirely. Founder Sam Dare published a pointed statement on X, writing: “The entire premise of Bittensor, the promise that drew builders, miners, validators, and investors into this ecosystem, is that no single entity controls it. That promise is a lie.”

$TAO Just Lost 20% Since Covenant AI Announced The Leaving With Bittensor@covenant_ai is leaving Bittensor. Sam Dare didn't just leave, he called the whole thing "decentralization theatre" and accused the founder of running a one-man show dressed up as a protocol.

This is the… https://t.co/rWboXGtaGa pic.twitter.com/CPXRpG0jhh

— Evening Trader Group (@Eveningtraders) April 10, 2026

Dare alleges that Bittensor co-founder Jacob Steeves took punitive action against Covenant after its subnet grew large enough to operate independently. Covenant had previously achieved a milestone worth highlighting: the largest decentralized LLM pre-training run in history with its Covenant-72B model. The team built that on a belief that AI training should be free from centralized control, a belief they now say Bittensor’s structure actively undermines.

Bittensor operates under a “triumvirate” multisig governance model, which the project has presented to the community as a form of distributed control. Whether that structure holds up under scrutiny is now the central question driving the heaviest selling pressure TAO has seen in months.

(SOURCE: TradingView)

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Can TAO Crypto Price Recover Above $300 This Week?

The drop is sharp, and the technicals aren’t offering much comfort. TAO fell from $325.10 to the $255–$270 range within 48 hours, confirming a daily MACD bearish crossover that had been forming along a multi-month descending trendline. Trading volume spiked above $1.9Bn, mostly due to traders selling. RSI sits near 63, technically healthy but failing to prevent the breakdown.

Key levels define the near-term path. Support at $300 was the critical floor; price has now broken beneath it, opening downside toward $250. A close below there would represent a more serious technical failure. On the upside, resistance at $300 is the first meaningful recovery target; a clean break there could re-engage momentum buyers and put the prior $365 rejection level back in play.

I'm not selling my $TAO in my #Altcoin portfolio.

At this point, this seems like a short shock impact on the markets due to a founder selling thousands of $TAO (after selling his own subnet token first) on the open markets.

Additionally, due to the news event, investors have…

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

Three scenarios are worth tracking:

• Bull case: TAO crypto reclaims $300 quickly, sentiment stabilizes after Steeves responds publicly, and buyers re-enter near the 200 EMA. Recovery toward $330 becomes viable within days.
• Base case: Price consolidates between $260–$290 for several sessions as the governance controversy digests. No fresh catalyst, no clean direction.
• Bear case: Continued silence from Bittensor leadership or further developer exits accelerate selling. A close below $260 risks a cascade toward $240.

Governance crises don’t resolve in 24 hours. Some traders are reportedly buying the dip, but the macro backdrop, geopolitical tension, and broader risk-off crypto positioning make a clean reversal harder to execute than usual.

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