Pi Network started August with a sharp decline, hitting a new all-time low of $0.32 on August 1. Although this altcoin has slightly recovered to $0.36, the prevailing sentiment remains pessimistic. This suggests the possibility that the price will return to the cycle's bottom or decline further below this level in the coming weeks.
Pi Up 4%, But Negative Divergence Threatens Uptrend
The price of Pi has surpassed the slight decline of the overall market to record a significant increase today. Over the past 24 hours, the price of this token has increased by 4%, reaching $0.36. Although this short-term price increase may signal a glimmer of optimism for PI holders, technical indicators suggest that caution remains crucial.
Firstly, the decrease in PI's trading volume while the price has increased over the past 24 hours is a concerning issue. In the last day, PI's trading volume has decreased by nearly 30%, currently at around $112 million.
The decline in volume while the price is increasing has created a negative divergence, indicating that PI's upward momentum lacks significant support. Furthermore, the indicators from the Parabolic Stop and Reverse (SAR) of PI have confirmed this bearish outlook. At the time of writing, the dots that make up this indicator are above the token's price, creating dynamic resistance at $0.47.
The Parabolic SAR indicator of an asset determines potential trend direction and reversal points. When the dots of the indicator are below the price of an asset, the market is in an uptrend. This indicator shows that the asset is experiencing bullish momentum and the price may continue to rise if buying pressure persists.
On the other hand, when the price is below these points, it signals that the market is in a downtrend. This indicates bearish momentum and the potential for PI’s price to continue declining unless there is a bullish reversal.
Bears Grip PI Near All-Time Lows—Only New Demand Can Save It
On the daily chart, PI fluctuates between the support level formed by a new all-time low of $0.32 and the resistance level above the price of $0.40. With sellers still in control, PI may continue to decline and attempt to retest the all-time low or break below this level.
However, if new demand emerges again, the price of PI could rise above $0.40, heading towards $0.46.