Pi Network : Heading Towards a Negative Spiral ?
The analysis of the Pi Network’s Directional Movement Index (DMI) shows a clear trend reversal, shifting from a bullish trend to a bearish trend. The ‘ADX index‘ which measures trend strength, has dropped from 43.68 to 39.17 in just two days. This indicates that the upward momentum is waning in the face of increasing selling pressure.
Pi DMI. Source: TradingView
This shift is confirmed by the crossing of the +DI and -DI lines, representing the strength of buyers and sellers, respectively. While the +DI drops from 22.11 to 13.29, the -DI jumps from 11.32 to 30.95, clearly indicating that sellers have taken control of the market. Unless there is a sudden trend reversal, the Pi network is likely to remain under short-term pressure.
Fleeing Capital : Market Losing Confidence in the Project
The Chaikin Money Flow (CMF), an indicator measuring incoming and outgoing money flows, has turned negative to -0.13 from 0.07 the previous day. This sudden shift from a positive to negative level reflects increased capital outflows and a decrease in demand. It is a weakness factor for the PI price.
PI CMF. Source: TradingView
If this downward trend in money flows persists, it could lead to sustained selling pressure on the Pi network. The scenario would change if new capital inflows quickly support prices.
Concerning Technical Configuration
To add to the concern, the Pi Network’s Exponential Moving Averages (EMA) signal the imminent appearance of a “death cross.” This is a technical setup typically seen as a bearish sign often preceding further declines.
If this setup is confirmed, it could push the PI price to test the support at $0.54. A break below could pave the way for a dive below the symbolic $0.50 mark. Only a rapid bullish surge from buyers could reverse this downward trend and allow PI to regain the resistance level at $0.66, aiming for $0.789.
The Pi Network is currently going through a turbulent phase, with a 10% drop in its price and several deteriorating technical signals. The bearish momentum seems to be settling in, with intensified capital outflows and the looming threat of a “death cross” over the project. If investors fail to swiftly reverse the trend, Pi could plunge below the $0.50 mark. The upcoming weeks are crucial for the future of the Pi network.
