After a 190% surge in May, Pi Network [PI] has continuously experienced profit-taking over the past two months, causing the chart price to drop from $1.67 to $0.40, a decline of 75%.
However, the price level of $0.40 has previously been a key support level that alleviated the sharp declines in April and June. This time, can that support level hold, and will there be a reversal in August?
Are sellers about to be exhausted?
On the daily chart, the super trend signal still firmly gives PI a 'sell' rating. This sell signal has remained unchanged for the past two months. In contrast, the RSI is approaching the oversold area, suggesting that sellers may be exhausted.
Both technical indicators saw significant increases during the May bull market. Therefore, a positive pivot may indicate that the downward trend could reverse. The recent rebound target will be $0.67 or $1 (50% Fibonacci level), and if that level is reached, it could rise by 60% or 150%.
However, losing the support level of $0.40 would weaken the chances of recovery and encourage bears to drag the altcoin down to $0.09.
Declining social volume
As of the time of writing, the market atmosphere is also poor. Since May, the social volume or market attention for PI on social networks has been on a downward trend.
The attempt to break the downward trend in mid-July failed to trigger a sufficiently strong rebound in the token.
Moreover, over the past two months, the weighted market sentiment has mostly been negative.
At the time of writing, the derivatives market also highlights a lack of interest, reflected in low funding rates and a decline in open interest (OI).
In fact, since the end of May, the open positions of this altcoin have dropped from nearly $17 million to below $12 million.
In short, the price of PI has fallen to the support level of $0.40, which previously triggered reversals. Although key technical indicators suggest that sellers may be about to exhaust, a strong rebound will depend on broader market sentiment.