The Pi Network's price decline has sparked concern among investors, with the token experiencing a 6% drop on Monday following a 7% decline the previous day. The retail demand for Pi Network is waning, as evidenced by the falling Open Interest to $8.48 million, indicating a reduction in leveraged positions. This trend is particularly concerning given the technical outlook, which suggests a potential correction towards the lower support trendline of a falling channel pattern around $0.075.
The situation is further complicated by the token unlocks, which are driving selling pressure. If supply continues to outpace demand, the downside pressure could persist, despite periodic technical rebounds. This dynamic is a critical factor for traders considering buying the dip, as it highlights the importance of not solely relying on historical price declines.
Sky Liu, founder of the Ju crypto exchange, offers valuable insights into this scenario. Liu emphasizes that assigning a definitive price floor to Pi Network at this stage is speculative, as the asset is in an early phase of price discovery. Valuation is influenced by liquidity conditions, circulating supply dynamics, and market participation, rather than established fundamental metrics. This perspective underscores the importance of considering market dynamics and not just historical price movements.
Liu also advises traders to avoid making decisions based solely on price declines. Instead, he recommends focusing on indicators such as trend stabilization, sustained trading volume, and improving order book depth. This approach is particularly relevant in highly volatile markets, where identifying an exact bottom can be challenging.
Looking ahead, the medium- to long-term valuation of Pi Network will depend on the pace of ecosystem development, real user activity, and the market's ability to establish efficient price discovery. Until these factors become more evident, elevated volatility should be expected as part of the asset's normal trading profile.
The technical analysis of Pi Network's daily chart reveals a steep corrective trend since late April, forming a falling channel pattern. The current price decline is heading towards the lower support trendline near $0.075. If the token slips below this level, the next key support zone is the 1.618% Fibonacci extension level at $0.0679, measured over the previous downswing.
The momentum on the daily chart is heavy, with the Relative Strength Index (RSI) at 15 indicating intense selling pressure and oversold conditions. The Moving Average Convergence Divergence (MACD) is also descending into negative territory, reaffirming firm sell-side pressure. However, a potential rebound from the support trendline near $0.075 could test the 1.272% Fibonacci extension level at $0.0961, followed by the $0.1000 psychological threshold.
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