TLDR
- TAO price dropped over 18% after Covenant AI, Bittensor’s biggest subnet operator, announced its exit
- Covenant AI founder Sam Dare accused Bittensor co-founder Jacob Steeves of centralized control
- Dare alleged emissions were suspended, moderation rights stripped, and subnets deprecated
- TAO is trading near $263–$292, below its 200-day moving average, with $250 as the next key level
- Futures open interest fell nearly 1% to $392.59 million, with heavy selling on OKX, Gate, and Bitget
Bittensor’s TAO token dropped more than 18% in 24 hours on April 10, 2026, erasing a recent rally of over 100%. The selloff was triggered by Covenant AI’s announcement that it is leaving the Bittensor network.
Covenant AI operated three subnets — Templar (SN3), Basilica (SN39), and Grail (SN81) — making it one of the most active contributors to the protocol.
Sam Dare, founder of Covenant AI, published a public statement accusing Bittensor co-founder Jacob Steeves of running a centralized operation behind a decentralized label.
BIG drama unfolding right now on $TAO
Covenant AI, owner of SN3, SN81 & SN39 has announced they're leaving Bittensor@DistStateAndMe accusations against @const_reborn, Bittensor's founder:
-Suspended emissions to Covenant's subnets
-Stripped their moderation rights over their… pic.twitter.com/uAdzNBMOjM— Jesus Martinez (@JesusMartinez) April 10, 2026
“Bittensor operates a triumvirate structure, three individuals who manage the multisig for network upgrades, presented to the community as distributed governance. It is not. It is decentralization theatre,” Dare wrote.
Dare alleged that Steeves suspended emissions to Covenant’s subnets, stripped their moderation rights over community channels, unilaterally deprecated their subnet infrastructure, and used strategically timed token sales to apply economic pressure.
Steeves “maintains effective control over the triumvirate, resists any meaningful transfer of authority, and deploys changes unilaterally whenever he chooses, without process and without consensus,” Dare said.
Covenant AI Founder Sells TAO Holdings
Dare sold all of his subnet holdings, including more than 37,000 TAO tokens from his wallet, according to on-chain data from taosats. The sale added direct selling pressure to the token.
Despite leaving Bittensor, Covenant AI said it will keep its research team, existing models, and work. The company said new project announcements are coming soon. “Decentralized, permissionless AI training is not a Bittensor feature. It is a technological capability that our team is eager to advance,” the statement read.
TAO was trading near $263–$292 at the time of writing. The 24-hour range was $262.51 to $341. Trading volume jumped 156% over the same period.
Key Technical Levels to Watch
Popular analyst Cheds Trading noted that TAO has fallen below its 200-day moving average and is heading toward the 50-day moving average at $250. The Relative Strength Index (RSI) dropped to 41, pointing to potential further downside.
$TAO some sell pressure here as price throws back to SMA 200 and prior range peak pic.twitter.com/C7sJ4HOzc1
— Cheds Trading (@BigCheds) April 10, 2026
Covenant AI’s Covenant-72B model had been a key driver of TAO’s previous rally. NVIDIA CEO Jensen Huang referenced the model on the All-In Podcast, which helped push TAO up over 90%.
CoinGlass data showed Bittensor futures open interest fell nearly 1% to $392.59 million within an hour. Selling was heaviest on OKX, Gate, Bitget, Hyperliquid, and LBank. Binance and Bybit had not yet shown a correction at time of writing.
TAO is currently trading near $263 with futures open interest at $392.59 million following Covenant AI’s exit.
