Decline in Pi Network's Performance: Reasons Explained
Pi Network's Cryptocurrency, PI, Sustains a 13.47% Drop in Value Over Week, Losing Ground to $0.6674
In a week's time, the PI token, native to the Pi Network, has seen a significant 13.47% decrease in value, settling at $0.6674. The major contributor to this downturn is the continuous daily token unlocks, which boost the market's selling pressure by introducing additional supply.
Swelling Supply, Suppressing Prices
Data reveals that the daily PI tokens released between May 31 and June 6 ranged from 7.35 million to 12.5 million, facilitating a daily potential selling volume of between $5.08 million and $8.65 million. The fate of the price hinges on whether demand increases at the same pace as the supply expansion.
- Circulating supply: 7.26 billion PI
- Maximum total supply: 100 billion PI
Increasing the liquidity of the market may dilute the price temporarily if the demand does not parallel the increase in supply.
Technical Insight: Descending Trend and Key Levels
Pi Network's PI token has been experiencing a downward trend since mid-May. The slide from approximately $0.77 to $0.69 coincides with technical indicators signaling a dominant downtrend. Notably, the breach of the $0.72 support level signaled that this range has now transformed into resistance.
Crucial Technical Milestones:
- Current Resistance: $0.720 - $0.730 (previously support reinforced as resistance)
- Critical Resistance: $0.769 (weekly high)
- Current Support: $0.675 (psychologically and graphically significant level)
- Primary Support Zone: $0.640 (previously horizontal consolidation base)
If PI fails to reclaim the $0.72 level, the price might continue to slide, potentially reaching as low as $0.675 or even $0.640. However, if the price surges above the $0.72 - $0.73 range and establishes a sustainable position above it, this could initiate a fresh uptrend towards $0.76 and beyond.
Summary: Persisting Selling Pressure
Daily token unlocks and a lackluster response from buyers are exerting pressure on Pi Coin's price. For the price to stabilize, a slowdown in supply, a bolstering of demand, and a breakthrough of critical resistances are indispensable. Therefore, it is advised that investors closely monitor the unlock schedule and the support/resistance levels mentioned above.
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- The constant release of PI tokens and the subsequent increase in market supply, coupled with a weak demand, are exerting pressure on the investment front of Pi Coin, causing its price to drop.
- To counteract this persisting selling pressure and stabilize the value of Pi Coin, it is essential to slow down the supply expansion, stimulate demand growth, and shatter crucial resistance levels mentioned in the technical analysis.
