The price of Pi Network’s native token, PI, is facing significant headwinds this May as the community braces for the unlock of approximately $139 million worth of PI tokens. Data from PiScan indicates that 234 million PI tokens will be released throughout the month, a development that has historically triggered increased sell-side pressure and could impede the altcoin’s attempts at recovery.
At the time of writing, PI is trading at $0.59, marking a 3% decline in the past 24 hours. This downward trend is further underscored by a substantial 50% plunge in trading volumes, suggesting a lack of market interest and a strengthening bearish sentiment surrounding the digital currency.
Looming Token Unlocks Cast Shadow Over Price Recovery
The impending release of a substantial amount of coin tokens is a primary concern for investors. Similar unlock events in the past have led to significant increases in selling pressure, potentially driving the price downwards. Analysts anticipate a repeat of this trend, which could further hinder any attempts by Pi Network to break free from its current bearish trajectory.
Despite these concerns, some analysts remain cautiously optimistic. Dr. Altcoin, a popular commentator, suggests that the Pi Core Team (PCT) has been actively working to mitigate the impact of these unlocks by absorbing PI from centralized exchanges. This strategy aims to maintain the price above the $0.50 mark.
Increased Mining Rate Adds to Downward Pressure
Adding to the challenges posed by the token unlocks is a slight 2% increase in the Pi Network’s mining rate for May. This increase means that more coin tokens are entering the circulating supply, contributing to inflationary pressures that could further weigh down the price. The combination of increased supply from unlocks and ongoing mining activity paints a bearish picture for the short-term price outlook of the coin.
Technical Analysis Signals Strengthening Bearish Momentum
Technical analysis of the Pi Coin’s 2-hour price chart reinforces the bearish sentiment. The Relative Strength Index (RSI) is exhibiting a pattern of lower lows, currently sitting at 46, indicating that the downtrend is likely to persist.
Also Read: $5 Pi Coin by May End? Experts Bullish Ahead of Pi Network Founder’s Consensus Speech
Key support levels to watch include the 23.6% Fibonacci level at $0.58. A failure to hold this level could trigger a further decline towards $0.56. Additionally, the tightening Bollinger Bands suggest that a significant price movement is on the horizon. While an upward breakout towards the upper band at $0.62 is possible, the prevailing headwinds suggest that a downside movement is more probable.
Considering the significant token unlocks and the bearish technical indicators, the short-term outlook for Pi Network’s price remains bearish. Traders should exercise caution and anticipate potential downward movement unless the coin can decisively overcome the resistance level at $0.62.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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