Pi Network (PI) Clings to $1 Support, but Faces Pressure Ahead of Mainnet Migration Deadline
Key Takeaways
- PI’s price recovered after it experienced a double-digit decline from its all-time high.
- The volume has fallen massively from $3 billion, with the migration deadline near.
- PI’s price bounces from support, yet low volume and CMF readings hint at a struggle.
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PI, the native token of the Pi Network, refrained from extending its five-day losing streak, gaining 7.28% in the last 24 hours. This PI coin price increase ensured the cryptocurrency did not drop below $1.
Some days back, the cryptocurrency showed readiness to slide below the key threshold. However, that did not happen.
Interestingly, this development also comes ahead of the Mainnet migration deadline scheduled for March 14. Despite the rebound, several indicators reveal that PI might struggle to sustain the gains. Here is why
PI’s Liquidity Weakens
On Feb. 28, the PI coin price hit an all-time high of $2.96, rallying from $0.61. However, as of this writing, the cryptocurrency has retraced a large portion of these gains.
This decline happened due to the high selling pressure and bearish sentiment in the market. While PI failed to drop below the $1 support, data shows that is unlikely to keep up with the upward pressure.
One reason for this thesis is PI’s volume. When its price reached an all-time high, its volume exceeded $3 billion.
However, today, the cryptocurrency’s volume has dropped $415.29 million. Volume plays a huge role in a cryptocurrency’s price direction as it shows the level of liquidity flowing in and out.
When volume rises alongside the price, the trend is bullish. But in this case, the decline in volume accompanied by the PI coin price increase means that the upswing does not have enough strength to maintain the movement.
Thus, if this remain the case, PI’s price might drop from $1.48 ahead of the project’s Mainnet migration deadline on Friday.
Regarding the migration, the Pi Core Team had reminded its users of the deadline which will end at 8 AM UTC on the aforementioned date. However, several users have voiced concerns, noting that they have been finding it challenging to move their coins from the Testnet to Mainnet.
Failure to resolve this could result in loss of this holdings, which could also drive bearish pressure around it.
PI Price Analysis: Breakout Chances Look Slim
On the 4-hour chart, the PI coin technical setup shows the formation of a falling wedge. This wedge, which is a bullish pattern, appears during consolidation in a downtrend, with price making smaller swings between lower highs and lower lows.
A breakout above the upper trendline signals a potential breakout to higher values. With PI’s price at $1.47, it has failed to breach the upper trendline.
Thus, a massive breakout might be unlikely especially with the current Chaikin Money Flow (CMF) reading. As of this writing, the CMF, which measures accumulation and distribution, has a reading of -0.09.
This indicates large selling pressure when compared to the buying volume. Should this remain the same, the PI coin price risks falling below the lower trendline of the falling wedge.
If validated, PI could decline to $1.18 at first. Should selling pressure intensify at this point, the value could sink to $0.62.
On the flip side, rising buying pressure could prevent this anticipated drawdown. For that to happen, the CMF reading has to rise to positive territory, which could help break the wedge’s upper trendline.
In that scenario, PI’s price might jump toward the $2 mark positioned at the 0.618 Fibonacci level.
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