Pi Network (PI) Struggles to Keep Up with the Recent Market Recovery, Down About 10% Over the Past Week

Pi Network (PI) has struggled to keep up with the recent crypto market recovery, dropping about 10% over the last week. At $0.5832, the token is currently trading roughly 80% lower than its all-time high of $2.99.

However, the recent trading volume is showing a slightly different picture.

Pi Network’s (PI) trading volume surged by nearly 35% over the last 24 hours, exceeding $128 million as traders are showing more interest in the token.

The technical picture is still largely uncertain, but this suggests that traders could be preparing for a more significant move, which could be a factor in the slight uptick from the lows seen last week.

The biggest level to watch will be the 50-day simple moving average, which comes in around $0.82. PI is still trading below that, and many other short-term moving averages like the 10-day and 20-day SMA are still indicating a downward trend.

Relative strength is at 38.7, which puts the token on the lower end of over-sold territory. But some technical indicators, like the moving average convergence/divergence, are suggesting that buyers may be slowly returning.

Bollinger Bands are showing PI is now trading at the lower band, which shows it’s trading in a lower volatility range and may be over-sold at the moment. A bounce from here could see the price move back up toward the middle band around $0.75, or higher.

If PI manages to break above the 50-day SMA with strong volume, it could push toward $0.85-$0.90. A rally past $1.00 would be a huge shift in sentiment, especially if it’s driven by some major news.

But if prices remain below key moving averages and selling continues, it could see PI retest support at $0.55 or even fall to $0.45, putting in the historical low again.

One of the biggest risks for Pi Network is token dilution. In April, 21.4 million new tokens were unlocked, which at the current price would be worth about $12.3 million.

An estimated 131 million tokens are expected to be unlocked every month for the next 12 months, which could have a huge impact on the price unless demand manages to increase.

To mitigate this risk, the Pi Foundation could consider several options. One solution could be a token burn. The Pi Foundation currently holds over 70 billion PI tokens, which at the current price would be valued at over $40 billion.

To allay investor fears and support the price, some of these tokens could be burned, which would reduce the circulating supply and potentially increase the value of remaining tokens.

Token burns can also be combined with fee-burning mechanisms to further support the token price. A portion of the fees generated by Pi Network’s ecosystem could be used on an ongoing basis to burn tokens.

Another potential catalyst for Pi Network is listing on a major exchange like Coinbase (NASDAQ:COIN) or Binance. There is increasing chatter in the community about a future listing, which, like other tokens, would unlock new demand and liquidity for the token.

For the time being, however, Pi Network’s ability to hold the 50-day MA as support may be the first indication that true strength is returning.