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Pi Network (PI) recently experienced a drastic 43% plunge, raising questions about its stability amidst evolving market conditions.
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Despite the downturn, certain indicators hint at a potential stabilization phase as selling momentum appears to weaken considerably.
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“If bullish momentum returns, we could see PI testing resistance levels around $3,” noted a market analyst, suggesting careful observation is necessary.
After a significant drop, Pi Network is facing critical resistance levels that could dictate its future trajectory in the crypto market.
Pi Network DMI Shows the Downtrend Is Losing Steam
Recent evaluations of Pi Network’s price action indicate a pronounced decline in trend strength, as captured by the Directional Movement Index (DMI).
The Average Directional Index (ADX), which quantifies trend strength, has significantly declined from a reading of 37.5 to 16 over the past few days. This drop signals that the sustained downtrend has lost its potency.
Notably, the ADX does not reveal market direction but gauges the intensity of price movements. In general, values exceeding 25 represent a strong trend, while measurements below 20 show weak or wavering price activity. With the ADX currently at 16, PI finds itself in a neutral zone where neither buyers nor sellers command significant momentum.
PI DMI. Source: TradingView.
Currently, PI’s +DI (positive directional index) has decreased from 25.8 to 17, indicating a loss of bullish strength. Meanwhile, the -DI (negative directional index) has climbed from 17.8 to 23, reflecting an uptick in selling activity.
This dynamic illustrates that PI remains in a downtrend, albeit one characterized by a lack of strong downward motion, as suggested by the ADX’s low reading. If the -DI continues to rise while the ADX remains under 20, the asset may linger in a sluggish downtrend.
However, should the ADX rise again alongside the -DI, this could amplify selling pressure, resulting in a more pronounced price drop. Conversely, a resurgence in buying activity that pushes the +DI above the -DI may facilitate a stabilization and lead to a consolidation period for PI.
PI BBTrend Is Still Negative, But Recovering From Recent Lows
The prolonged downtrend of Pi Network is mirrored by its BBTrend indicator, which has tracked a negative trajectory since late February.
Just yesterday, the BBTrend reached a considerable low of -27.9, denoting severe selling pressure before rebounding to its current level of -6.6. As a volatility-oriented measure derived from Bollinger Bands, BBTrend helps to discern the strength and direction of market trends.
Values exceeding zero are indicative of bullishness, while negative readings denote bearish momentum. Moreover, when BBTrend dips below -10, it often signals an oversold condition, with any upward movement toward neutrality typically suggesting a respite in selling pressure.
PI BBTrend. Source: TradingView.
While the BBTrend is still negative at -6.6, the notable recovery from extreme lows indicates that selling pressure is beginning to ease.
This recovery hints that market conditions could be stabilizing, even though PI is not yet positioned in bullish territory. Should the BBTrend continue its ascent toward zero, it may foreshadow a trend reversal or at least a phase of consolidation ahead of future movements.
Conversely, should the BBTrend descend once more and fail to sustain upward momentum, PI may encounter renewed downside challenges, making it imperative to monitor whether the recent upward trend will hold.
Pi Network Could Rise To Test $3 In March
Following its steep 43% decline, Pi Network faces critical resistance following a recent near-$3 peak, coinciding with a sharp downturn linked to legal warnings from authorities in Vietnam.
If conditions begin to shift favorably, the initial resistance level to monitor is at $1.80. A decisive breakout above this threshold could signal increased buying activity, potentially propelling PI toward $2.35.
Should bullish forces gather and replicate previous surges, the price could extend further to $2.97, with hopes of breaking through the $3 mark for the first time.
PI Price Analysis. Source: TradingView.
However, this optimistic scenario hinges on active participation from buyers, who must reclaim control and propel prices past these key resistance zones.
On the flip side, should selling pressures mount and the downtrend reassert itself, the $1.50 support zone will come into play.
A breach of this area could expose PI to further risks, with the $0.80 mark presenting the next significant support level. Such an outcome could indicate that bearish sentiment remains strong, potentially leading to an extended phase of decline.
Conclusion
In summary, while Pi Network has experienced a substantial downturn, critical indicators point to a potential stabilization. Observing key price levels and market sentiment will be critical as traders prepare for possible movements in the near future.
