Bearish Indicators Suggest PI Network May Test Support Near $0.50 Amid Rising Selling Pressure

• Pi Network (PI) experiences a significant downturn, with a 10% drop as bearish indicators signal a shift in market sentiment.

• Simultaneously, the Chaikin Money Flow (CMF) plunged to -0.13, highlighting an increase in outflows that further erode buyer confidence.

• The impending death cross of EMA lines raises concerns about support at $0.54, which could lead to a decline below $0.50 if bearish momentum persists.

As Pi Network faces growing bearish signals, a critical analysis reveals potential risks ahead, including the possibility of slipping below vital support levels.

Bearish Momentum Builds as PI Network’s DMI Flips to Downtrend

Pi Network’s (PI) Directional Movement Index (DMI) has demonstrated a clear shift in market momentum, with the Average Directional Index (ADX) declining from 43.68 to 39.17 over the past two days. This drop in ADX suggests that bullish momentum is weakening, which could allow bearish sentiments to dominate the market.

Despite ADX readings still indicating a moderately strong trend, the recent decline signals a crucial turning point. Whenever the ADX starts to decline, it often signifies that the current trend—whether bullish or bearish—is losing strength, thus raising flags for traders and investors.

Furthermore, the movement of the +DI (Directional Indicator) and -DI indicates a power shift: the +DI has plummeted from 22.11 to 13.29, whereas the -DI surged from 11.32 to 30.95. This crossover confirms that sellers are gaining control over the market, suggesting that continued price declines may be imminent.

If the -DI continues to strengthen and the ADX remains above its current levels, traders may want to prepare for further downside movements in the price of PI.

Selling Pressure Intensifies as Outflows Accelerate on PI Network

The Chaikin Money Flow (CMF) for Pi Network has also turned sharply negative, dropping from 0.07 to -0.13 within a day. This swing is significant, as the CMF reflects money inflows and outflows, providing insights into market sentiment.

Values above zero signify buying pressure, while negative values indicate selling pressure. The recent descent below zero could be indicative of a broader trend reversal, potentially leading to increased selling activity.

The recent CMF reading of -0.13 signals that outflows have accelerated, and this growing selling pressure is a testament to declining buyer confidence in PI’s market dynamics. If this trend in negative outflows continues, PI could struggle to regain bullish momentum without a significant influx of new buying.

Will PI Fall Below $0.50?

The looming death cross in Pi Network’s EMA lines, characterized by the short-term moving average crossing below the long-term moving average, indicates a potential bearish trend. Historical data suggests that death crosses often precede further declines, putting PI at risk of retesting the crucial support level around $0.54.

If the price breaks down through this support level, forecasts predict a potential decline to below $0.50. This situation becomes even more pressing amid concerns over market confidence in the wake of past incidents, such as the OM token collapse associated with Mantra, which has troubled investors regarding transparency in related projects.

However, should market conditions shift favorably, and buyers re-engage, the price may attempt to move back toward the resistance level at $0.66. A strong breakthrough past this resistance could be a signal of renewed bullish sentiment, and the next bullish target could rise to around $0.789, potentially confirming the resilience of the recovery.

Conclusion

In conclusion, Pi Network faces significant bearish pressures, as evident from the shifting DMI, declining CMF, and potential EMA death cross. The current market climate poses risks to price stability, particularly around critical support levels. Traders should remain cautious and keep a close watch on market indicators for signs that could inform short-term strategies. Continued observation of trading volumes and momentum indicators will be essential.