Last week, the PI token attempted a bullish breakout by breaking through the downward parallel channel that had limited its price for several weeks.
However, the upward trend did not last long. PI failed to maintain its upward momentum and quickly reversed, showing a typical dead cat bounce.
PI, Increasing Selling Pressure
A dead cat bounce is a phenomenon where an asset's price temporarily recovers during a long-term downtrend. This can make traders mistakenly believe a reversal is in progress, but the price soon falls to a new low.
PI's breakout seemed like the beginning of a recovery after weeks of decline. However, its failure to maintain the upward trend and subsequent fall confirmed it was a dead cat bounce, and the current downtrend threatens to push PI to an all-time low.
The Balance of Power (BoP) indicator on the PI/USD daily chart shows -0.84, indicating that selling pressure remains strong.
The BoP indicator helps identify momentum changes by measuring the strength of buyers and sellers in the market. When the value is positive, buyers dominate the market and drive new price increases.
Conversely, when the BoP value is negative, sellers dominate the market with little buying resistance. This confirms continued downward pressure and weakening investor confidence.
PI's negative BoP value strengthens the downward outlook and suggests selling activity may continue unless new demand emerges.
Additionally, PI's Moving Average Convergence Divergence (MACD) indicator confirms a bearish bias for the altcoin. Currently, PI's MACD line (blue) is below the signal line (orange).
The MACD indicator identifies the trend and momentum of price movements. It helps capture potential buy or sell signals through crossovers between the MACD and signal lines.
When the MACD line is below the signal line, as in PI's case, it indicates weakening buying activity and is considered a sell signal. Therefore, this could exacerbate downward pressure on PI's price.
Traders Watching PI's $0.40 Support Level
If downward pressure continues, PI could further decline, intensifying losses for holders who invested in last week's breakout. In this case, the altcoin's value could return to its all-time low of $0.40.
Conversely, if market sentiment changes and buying activity surges, the PI network's price could rise to $0.66.
