Bearish clouds are gathering over Pi Network.
Analysis of the daily chart shows that on July 4, the token closed at $0.46 and has since been unable to break through this level. Former support has now become a resistance zone, and PI is struggling to break through it due to weakening demand.
A prolonged drop has pushed the price below the Leading Spans A and B lines of the Ichimoku cloud. This reflects bearish sentiment among holders. These lines now form dynamic resistance levels at $0.51 and $0.63.
When an asset trades above the cloud, it indicates a strong bullish trend and positive market sentiment.
However, when the price falls below the cloud, as in the case of PI, it signals a strong bearish trend. This means that sellers are in control, and upward momentum is limited.
Since June 25, the Smart Money Index (SMI) for Pi Network has been steadily declining. During this time, it has lost 9% and currently stands at 1.22.
The SMI index assesses the activity of experienced or institutional investors by analyzing their actions at the beginning and end of the trading day.
The rise in the indicator suggests an increase in purchases, indicating growing confidence in the asset. When the indicator falls, it points to active selling and a decrease in confidence among experienced investors. This underscores the lack of faith among key token holders in a quick recovery of the Pi Network price.
Will PI drop to historical lows?
The current weakness of technical indicators raises caution among investors hoping for a quick recovery. If bears strengthen their positions and PI sales increase, the price may break support at $0.44 and fall to the historical low of $0.40. However, an increase in demand could change the situation. If new buyers enter the market, Pi Network could surpass the $0.47 mark and reach $0.50.