Bittensor Plummets 20% After Key AI Research Group Exits Over Governance Dispute

Bittensor (TAO) suffered a significant setback when key AI research group Covenant AI exited the network due to governance disputes. The departure led to a 20% price drop in a single day, with TAO plummeting to $253 before recovering slightly to around $263.

Covenant AI had been operating on Bittensor's network and accused co-founder Jacob Steeves of exercising too much control over the project's governance. The group alleged that its emissions were suspended, permissions were revoked, and protocol changes were made without its input.

The token's market capitalization fell to approximately $2.5 billion, with Covenant AI selling 37,000 TAO worth over $10 million as part of its departure. Analysts noted that sell volume reached a 24-hour high since December 2024, preceding the news by a full day.

Despite the sharp decline, some market watchers saw potential for a rebound due to TAO's Relative Strength Index (RSI) being at an oversold level of just 16. The RSI measures momentum on a scale from 0 to 100, with readings below 30 typically indicating oversold territory.