Key Points to Consider
The price of Pi Network’s digital currency has settled around the $0.40 mark, a critical point that could lead to a price recovery in August. However, a positive shift depends on the overall mood of the cryptocurrency market.
After a significant surge of 190% in May, Pi Network [PI] has experienced consistent profit-taking activities over the last couple of months. As a result, the value has decreased by 75%, dropping from $1.67 to $0.4 on trading charts.
Importantly, the $0.40 price has acted as a reliable support level, preventing further price declines in April and June. The question now is whether it will maintain its position and enable a turnaround in August.
Signs of Weakening Selling Pressure?
Source: PI/USDT, TradingView
Analyzing the daily charts, the SuperTrend indicator still suggests a strong ‘sell’ signal for PI, a recommendation that has persisted for the last couple of months. However, the Relative Strength Index (RSI) is approaching the oversold territory, suggesting a possible exhaustion of selling momentum.
Both technical indicators displayed a substantial rise during the May bull market. Consequently, a positive shift in these indicators could signal a potential reversal of the current downtrend. The initial targets for recovery would be $0.67 or $1 (the 50% Fibonacci level), which could lead to gains of 60% to 150% if achieved.
On the other hand, if the $0.4 support fails to hold, the likelihood of a recovery would diminish, potentially encouraging bears to push the altcoin’s price down to $0.09.
Diminishing Social Media Engagement
The general market atmosphere appears unfavorable at the moment. Social volume, which reflects market interest in PI across social media platforms, has been declining since May.
An unsuccessful attempt to break the ongoing downtrend in mid-July did not generate a strong enough rally for the cryptocurrency.
Furthermore, market sentiment, as measured by weighted sentiment analysis, has remained predominantly negative over the past two months.
Source: Santiment
Currently, the derivatives market reflects a subdued level of interest, as indicated by low funding rates and a decrease in Open Interest (OI).
In fact, the altcoin’s OI has fallen from almost $17 million to under $12 million since late May.
Source: Coinalyze
In summary, the price of PI has decreased to its $0.4 support level, a point that has previously initiated reversals. Although key technical indicators suggest that selling pressure may be nearing exhaustion, any significant rebound will depend on the broader market sentiment.
Disclaimer: This analysis is based on the writer’s interpretation of available information and should not be considered as financial, investment, or trading advice.