The price of Pi Network has made a notable recovery over the past ten days, coinciding with a stabilization in the crypto market as investors seize the opportunity to buy during the downturn.
Pi coin (PI), the popular tap-to-earn cryptocurrency, reached a peak of $0.755 on Monday, marking its highest point since March 29. This figure represents a remarkable 92% increase from its lowest value earlier this year.
Prior to this resurgence, the coin was on a steep decline as many pioneers, users who mined the coin before its mainnet launch in April, began offloading their holdings.
The price also fell due to the challenging conditions surrounding centralized exchange listings and ongoing worries regarding token dilution. As indicated below, over 1.56 billion tokens are set to be unlocked in the upcoming year, contributing to further dilution concerns.
Pi Network price has developed a precarious chart pattern
The current recovery of Pi coincides with Bitcoin (BTC) and several other cryptocurrencies displaying resilience. Bitcoin has remained stable above the $80,000 mark, even as the stock market and the fear and greed index have dropped.
The four-hour chart indicates that the coin surged after forming a falling wedge pattern, characterized by two descending converging trendlines. A bullish breakout typically occurs when these lines approach their convergence point.
On a favorable note, the coin has climbed above the 50-period Exponential Moving Average, indicating a potential momentum shift. It has also surpassed the Woodie pivot point.
Nevertheless, indications of a possible reversal are emerging. The price is shaping a rising wedge pattern, with the lower trendline connecting higher lows established since April 5. In technical analysis, rising wedges are often regarded as bearish patterns.
Moreover, a bearish divergence is beginning to form. The Percentage Price Oscillator is nearing a bearish crossover, and the Relative Strength Index has started to trend downwards.
Consequently, Pi might be at risk of a significant pullback, with the next critical support level being the all-time low of $0.3979, approximately 47% below the current price.
However, this bearish scenario could be negated if the price can break above the initial resistance at the Woodie pivot point, currently at $0.8610. Should this occur, the next target would be the psychologically important $1 mark, roughly 32% above the present price.