Tensor(TAO) first halving approaching, market remains in 'cautious mode' despite supply reduction… increasing technical bearish signals

Tensor(TAO) is experiencing a deepening bearish structure as it fails to recover above $300 as of Monday. Despite the upcoming first halving scheduled for this week, which will reduce daily supply by 50%, the sentiment in the derivatives market remains colder than expected.

Halving is good news but market response is lukewarm… Decrease in Futures OI and Negative Funding Indicate Caution

The supply reduction caused by the Tensor halving theoretically increases scarcity. After the halving on Monday, the issuance per block decreases from 1 TAO to 0.5 TAO, and the daily issuance drops from 7,200 to 3,600, roughly halving. The alpha reward mechanism allocated to subnet miners, validators, and operators remains unchanged, so only the new supply rate slows down.

However, signals from the futures market are contrary to the spot market. The open interest (OI) of TAO futures has recently decreased by 1.18% in the past 24 hours, shrinking to around $210 million. This indicates traders are hesitant to enter new positions and are reducing existing exposure.

A more notable indicator is the reversal of the funding rate. It plummeted from around 0.0060% on Monday morning to -0.0022%, entering negative territory. This suggests that short positions are now receiving a premium, indicating the market is more focused on hedging downward risk than expecting upward movement. Even with the supply-positive news of the halving, market sentiment remains defensive.

Technical pattern breakdown… A gradual decline target is set

On the 4-hour chart, TAO broke downward from a symmetrical triangle pattern. After the support trendline connecting the lows of December 1 and 7 was broken, the price is currently testing near the 50-period exponential moving average (EMA) at around $291.

If the price turns downward again in this zone, the following staged decline scenarios could unfold:

• Stage 1: Intermediate resistance at $286 (S1 pivot)
• Stage 2: Major downside target at $265
• Stage 3: Deep correction scenario at $250

Daily momentum indicators also support the bearish outlook. The RSI remains below the neutral level at 42, indicating continued selling pressure. The MACD and signal lines are deepening in negative territory, revealing a gradual accumulation of bearish momentum.

Limited upside potential… Recovery above $291 is essential

A rebound scenario is not entirely closed. If Tensor can regain and close above the 4-hour 50 EMA at $291 in the short term, there is room for a rebound toward the upside pivot target of $305.

However, this zone overlaps with previous retracement sell-offs and technical resistance. Without clear buying momentum, a simple technical rebound could still be vulnerable to renewed selling pressure.

Currently, Tensor is in a “wait-and-see” mode, caught between the theoretical value of supply-positive news and the actual lack of demand. Even with the structural positive factor of the halving, if market sentiment does not improve, technical bearish signals are likely to continue dominating.