Pi Coin Price Risks 23% Crash As Inflows Surge, Risky Pattern Forms

Key Insights:

• Pi Coin price could crash by at least 23% in the next few days.
• The token has formed a head-and-shoulders pattern.
• On-chain data shows that the Pi Network’s exchange inflows are rising

Pi Coin price was left behind in the ongoing crypto market rally that pushed Bitcoin to over $110,000. It has plunged by over 83% from its all-time high. Also, the technicals suggest that it has a 23% downside that will push it to a make-or-break level.

On-chain data also shows that Pi Network is at risk as more investors move their tokens into exchanges. On top of this, the increased token unlocks and lack of an exchange listing point to further deterioration.

Pi Coin Price Technical Analysis Points to a 23% Crash

The 12-hour chart shows that the Pi Coin price could crash further in the coming days. It has formed a head-and-shoulders pattern. This pattern comprises three unique parts: a head, two shoulders, and a neckline.

In this case, the head section is $1.6657, while the right and left shoulders are between $0.66 and $0.78. The neckline, which is the make-or-break level, is at $0.4265, its lowest level in April and June.

Therefore, there is a risk that the Pi Network price will have a 23% bearish breakdown to the neckline at $0.4264. A drop below this pattern will confirm its bearish view. It points to further downside, potentially to the psychological point at $0.20.

Pi coin price remaining below the 50-period moving average further emphasizes the bearish case. In contrast, the MACD indicator has remained below zero since May.

On the other hand, a move above the right shoulder at $0.66 will invalidate the head and shoulders pattern. It points to more upside, potentially to $1.

Investors are Capitulating as Exchange Inflows Jump

There are signs that Pi Network investors are capitulating and dumping their tokens. PiScan data shows that these investors moved over 13.3 million coins to exchanges on July 3. Most of these tokens moved to OKX, followed by Bitget and  Gate.io.

On the other hand, investors transferred 3 million Pi Coins from exchanges, resulting in a net flow of 10.3 million. Increased exchange balances, especially when the price is falling, indicate that investors are capitulating and opting to take losses.

Pi Coin Price Faces Pressure as Massive Token Unlocks Loom

Meanwhile, the Pi Coin price could be at risk as more tokens enter the market through unlocks. Data shows that over 304.3 million coins valued at $304.2 million will be unlocked in the next 30 days. July 4 will be the highest day, with tokens valued at over $9.2 million being unlocked.

Pi Network will have more unlocks in the future. Its circulating supply stands at 11.7 billion tokens against a maximum supply cap of 100 billion.

Token unlocks put a coin under pressure by adding it into the circulating supply, especially when demand is weak. Crypto projects often offset the token unlocks by implementing transaction-based burns.

For example, Tron generates millions of tokens daily, then burns millions more using part of its transaction fees. As a result, its circulating supply has dropped to 94.7 billion, down from 96.17 billion in July last year.

Pi Coin price has crashed following its highly anticipated mainnet launch in February. This crash likely happened because of the increased token unlocks. It also occurred because most tier-1 exchanges like Binance and Coinbase have not listed it.

The ongoing exchange inflows, the formation of a head-and-shoulders pattern, and ongoing token unlocks suggest further downsides. It could dip to the neckline at $0.4264. A drop below that neckline will point to more downside in the coming weeks.

The risk to the bearish thesis is if it gets listed by one or more major crypto exchanges. Such a move would likely lead to a short-squeeze, as many tokens have done.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.