Pi Coin is on the verge of a major price drop if it loses an important support level. A potential catalyst for this collapse of Pi Network would be the token unlock this month, which is the largest unlock until 2027. The value of Pi Network is trading at $0.4565 today, July 7, down 72% from its peak in May and well below its all-time high.
Pi Coin Could Collapse Before Unlocking 272 Million
The price of Pi Coin faces significant risks this month that could push it much lower in the coming months. Data shows that the number of tokens in circulation will increase significantly this month as the network unlocks over 272 million tokens currently valued at more than $106 million.
This token unlock occurs when the Pi Foundation releases tokens to the market, thereby increasing the circulating supply. This unlock increases the circulating supply, which could negatively impact the price, especially when demand is limited.
This month's token unlock is notable as it will be the highest unlock until December 2027, when over 432 million tokens will be unlocked. After this unlock, monthly releases will occur for the next three consecutive months, followed by a continuation in December, when over 472 million tokens will be released.
Most cryptocurrencies unlock their tokens periodically. The risk of Pi Network is the volume of tokens they plan to release over the years. CoinMarketCap data shows that Pi has a maximum supply of 100 billion tokens and a circulating supply of 7.6 billion, meaning 92.7 billion coins will be released in the future.
The ongoing token unlock may explain why the price of Pi Coin remains under pressure following major developments. For example, the network launched a $100 million ecosystem fund in May. The network also launched Pi Network AI Studio, allowing users to easily build AI applications.
Technical Analysis of Pi Network Price
The daily timeframe chart shows that the price of Pi Coin has remained under pressure for the past two months as buyers remain on the sidelines. On the positive side, there are signs that it has formed a double bottom pattern at $0.40 and a neckline at $1.6466. This pattern indicates the possibility of recovery as long as it stays above the double bottom.
However, Pi Network remains below the short-term and mid-term moving averages, which are creating significant resistance. Therefore, a drop below the double bottom pattern at $0.40 would indicate a higher likelihood of further declines, potentially down to an all-time low of $0.0062, a decrease of more than 90% from the current level.
The bearish forecast for Pi Network will become invalid if this token rises above the important resistance level of $0.6642, the highest fluctuation on June 25. A surge above that will indicate more upward potential, possibly reaching $1.
Pi Network was launched with many promises, but its price has been a major disappointment as it continues to decline. Technical analysis shows it is on the verge of a major collapse if it loses the important support level of $0.40.