The price of PI has struggled to maintain its upward momentum over the past week and has fallen by almost 20% in the last 7 days.
Currently trading at $0.48, this altcoin is experiencing strong downward pressure, and technical and on-chain data reflect a negative market outlook.
PI Increases Decline Signals
A new bearish crossover in PI's Moving Average Convergence Divergence (MACD) indicator suggests a higher probability of short-term losses. This pattern appears when the asset's MACD line (blue) falls below the signal line (orange), indicating the breakdown of the market's upward structure.
The MACD indicator identifies price movement trends and momentum. It helps capture potential buy or sell signals through crossovers between the MACD and signal lines.
For PI, the MACD line crossing below the signal line indicates increasing downward momentum and weakening buying strength. Traders interpret this as a sell signal. Accelerated selling activity could intensify downward pressure on PI's price.
Moreover, PI is approaching an important token unlock event next month. According to PiScan's data, 31.229 million PI tokens, worth $152 million at the current price, are set to be unlocked in the next 30 days.
This unlock presents a significant challenge for the altcoin, especially considering the weak bullish sentiment. With notably low market buying interest, there's little guarantee that newly unlocked tokens will be absorbed by sufficient demand.
If demand fails to match increased circulating supply, it could exacerbate selling pressure. In such a scenario, supply would overwhelm demand, applying additional downward pressure on PI's price.
PI's Decline... Will Buying Pressure Emerge Before Breaking $0.40?
On the daily chart, PI has slipped back into a downward trend line. While it broke through this trend line on June 25th, buying pressure quickly disappeared, causing the token to return to a downward trajectory.
As downward momentum continues to accumulate, PI risks revisiting its all-time low of $0.40.
However, a sudden surge in new demand could stabilize the price and invalidate the bearish outlook. In such a case, PI could rebound and rise to the resistance level at $0.57.
