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Why PI’s Breakout Wasn’t What It Seemed: Network Nears All-Time Low

2 mins
Updated by Ann Maria Shibu
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In Brief

  • PI's recent breakout to $0.66 quickly retraced, signaling a dead cat bounce amid a prolonged downtrend.
  • Negative Balance of Power and MACD indicators show sustained sell-side pressure, weakening investor confidence.
  • PI could test its all-time low of $0.40 unless buying activity increases and reverses the bearish trend.
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Last week, the PI token attempted a bullish breakout, breaking above a descending parallel channel that had capped its price for several weeks. 

However, the rally was short-lived. PI failed to hold onto its gains and quickly retraced, signaling what now appears to be a textbook dead cat bounce.

PI Faces Heavy Sell Pressure 

A dead cat bounce is a temporary, short-lived recovery in the price of an asset in a prolonged downtrend. It tricks traders into thinking a reversal is underway, only for the price to resume falling to new lows quickly. 

PI Smart Money Index.
PI Smart Money Index. Source: TradingView

PI’s breakout looked like the start of a recovery following several weeks of decline. However, the failure to sustain the rally and the drop that followed confirms it was a dead cat bounce, with bearish momentum now threatening to push PI toward its all-time low.

Readings from the PI/USD one-day chart show its Balance of Power (BoP) at -0.84, indicating that sell-side pressure remains significant.

PI BoP.
PI BoP. Source: TradingView

The BoP indicator measures the strength of buyers versus sellers in the market, helping to identify momentum shifts. When its value is positive, buyers dominate the market over sellers and drive newer price gains. 

Conversely, negative BoP readings signal that sellers dominate the market, with little to no buyer resistance. This confirms the sustained downward pressure and weakening investor confidence.

The negative BoP readings for PI reinforce the bearish outlook, suggesting that selling activity could continue unless new demand resurfaces.

Furthermore, PI’s Moving Average Convergence Divergence (MACD) indicator confirms the bearish bias against the altcoin.  At press time, PI’s MACD line (blue) rests below the signal line (orange).

PI MACD
PI MACD. Source: TradingView

The MACD indicator identifies trends and momentum in its price movement. It helps traders spot potential buy or sell signals through crossovers between the MACD and signal lines.

As with PI, when the MACD line rests below the signal line, it indicates bullish momentum, suggesting waning buying activity. Traders see this setup as a sell signal. Hence, it could exacerbate the downward pressure on PI’s price.

Traders Eye $0.40 Support as PI Struggles to Hold Ground

If the downward pressure persists, PI could slide even further, deepening losses for holders who bought into last week’s breakout. In this scenario, the altcoin’s value could revisit its all-time low of $0.40.

PI Price Analysis.
PI Price Analysis. Source: TradingView

Conversely, if market sentiment shifts and buying activity spikes, PI Network’s price could rally to $0.66. 

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Abiodun Oladokun
Abiodun Oladokun is a Technical and On-Chain Analyst at BeInCrypto, where he specializes in market reports on cryptocurrencies from diverse sectors, including decentralized finance (DeFi), real-world assets (RWA), artificial intelligence (AI), decentralized physical infrastructure networks (DePIN), Layer 2s, and meme coins. Previously, he conducted market analysis and technical assessments of various altcoins at AMBCrypto, utilizing on-chain analytics platforms like Messari, Santiment...
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