Despite bullish momentum on the Pi Network chart, the lack of demand could undermine the bulls' efforts to reverse the short-term trend. Find out what lies ahead for the PI token.
Can we rely on Pi Network buyers to reverse the trend?
In May, Pi Network (PI) nearly erased all gains made at the beginning of the month. By early June, the token was trading at its lowest in three months, with bulls showing signs of weakness.
At the time of writing this article, Fibonacci retracement levels indicated that the $0.80 level was the next key resistance on the daily chart.
Pi Network Analysis: Price Outlook
On the 12-hour chart, the token seemed to be forming a descending triangle pattern, which generally signals the end of a bearish trend. A breakout above the upper trendline of the pattern could lead to a strong rally.
However, the triangle pattern on the Pi chart presented some issues. The two trend lines have not been tested often enough, especially the lower one. From May 20 to May 29, a large empty space was visible on the lower side of the pattern.
The Money Flow Index (MFI) indicated that the trend remained bearish, and the OBV noted weak selling volume behind the Pi Network token over the last ten days.
Indeed, the PI remains stuck at $0.64. The narrowing of the MRC indicates a strong movement approaching. The Pi is being pulled between the trendline to liquidate downwards at $0.61 and a liquidity zone to test upwards at $0.80.
Although the PI seems eager to go higher, the lack of volume and interest calls for caution.
Short-term outlook and key levels to watch
On the 4-hour chart, the decline of the OBV over the last week was clear. This highlighted selling pressure on Pi Network that forced it to test the lows of May 8. Currently, the token was attempting to break through the resistance level of $0.66.
This effort may not succeed for some time, especially given that the OBV has not yet reversed its downtrend. Although the Money Flow Index (MFI) shows bullish signs, without stable demand, it is likely that the token will not manage to turn the $0.66 level into support.
In conclusion, despite the possible bullish momentum observed on the charts, Pi Network may still face challenges in the short term due to weak demand. However, low volumes are sometimes used by smart money to manipulate the price and force retail investors into panic selling or FOMO buying. This is why the two scenarios indicated on the chart are likely.
A breakout to the upside in the coming days would not bode well, as it could use FOMO to sell massively and exit their positions.
Investors should closely monitor key resistance levels to assess future investment opportunities.
