What are the potential upside and downside scenarios for the TAO token price and its effect on the company's market cap?
Upside case – The Q2 release shows Oblong’s treasury now holds roughly $8 million of TAO and is actively using the token to “power decentralized AI.” If the AI‑hype cycle continues and Bittensor’s ecosystem gains real‑world deployments (e.g., AI model‑as‑service, data‑marketplace contracts), TAO could experience a classic supply‑constrained rally. Technical charts for TAO have recently broken a descending triangle on the 4‑hour timeframe and are testing a key resistance at the 200‑day moving average (≈ $0.42). A clean close above that level would likely trigger a 30‑45 % upside move toward the next Fibonacci extension around $0.58‑$0.62. For Oblong, the equity price is tied to its net‑asset‑value (NAV) model: each 1 % rise in TAO translates into roughly a $80 k increase in the company’s market cap (≈ $8 M × 1 %). A 40 % TAO rally would therefore add ≈ $3.2 M to OBLG’s market cap, potentially pushing the share price up 12‑15 % in a risk‑on crypto environment.
Downside case – The token remains exposed to broader crypto market weakness, regulatory scrutiny of AI‑related tokens, and the possibility that Bittensor’s utility does not scale as projected. TAO is presently testing a strong support zone near the 50‑day moving average (≈ $0.29). A break below that could open a rapid descent to the long‑term trendline around $0.18, a 55‑% drop from current levels. Such a move would shave roughly $4.4 M off Oblong’s treasury valuation, eroding about 55 % of the $8 M allocation and cutting the company’s market cap by ≈ $0.44 M (≈ 1.7 % of OBLG’s total equity). In a bearish crypto backdrop, the share may trade at a discount to its NAV, prompting short‑term downside pressure.
Trading implications – In a bullish scenario, a long position in TAO (or a leveraged OBLG‑linked ETF) is justified once the token clears the 200‑day MA with volume above the 20‑day average; set a stop just below $0.38 to protect against a false breakout. In a bearish environment, hedge OBLG exposure with a put spread or short‑sell TAO on a tight 1‑hour chart, targeting the $0.18 support. Monitoring on‑chain activity (staking inflows, model deployments) and macro crypto sentiment (Bitcoin > 30‑day SMA) will help confirm which scenario is materializing.