Pi Network: Understanding How Supply Zones Affect PI's Performance

In recent days, Pi Network (PI) has experienced a modest rise of 2.03%, alongside increased trading volume as the weekend begins. However, key supply zones continue to pose challenges for a significant price recovery. Additionally, new developments, including mainnet migration and palm print authentication testing, have not significantly uplifted PI's market sentiment.

Key Takeaways

Market Performance: PI saw a 2.03% increase in 24 hours, but bearish trends persist.
Technical Updates: Key developments include the completion of mainnet migration and testing of palm print authentication.
Sentiment Analysis: Current market data shows a dominant selling pressure with indicators suggesting continued bearish momentum.
Price Bounce Potential: Fibonacci retracement levels indicate a possible bounce-back towards $0.19-$0.20.
Trading Strategy: Caution is advised; traders may find better opportunities at higher retracement levels.

PI bulls attempt a recovery, but supply zones keep them in check

Analyzing the Current Market Sentiment

PI 1-day Chart Source: PI/USDT on TradingView

Despite the recent uptick, the sentiment surrounding PI remains predominantly negative. An earlier report from AMBCrypto indicated ongoing bearish pressures, with sellers firmly in control across higher timeframes. The Chaikin Money Flow (CMF) is currently at -0.06, indicating that selling pressure has remained strong since early December, with capital continually flowing out of the PI market.

Furthermore, a bearish crossover of the MACD occurred nearly two weeks ago, continuing to reflect negative momentum in the market.

Examining the Possibility of a Price Recovery

PI 4-hour Chart Source: PI/USDT on TradingView

Employing Fibonacci retracement from the decline between $0.216 and $0.150 observed in January, it appears there could be a slight rebound towards the range of $0.19-$0.20, correlating with the 61.8% and 78.6% retracement levels. The MACD shows signs of a short-term bullish trend as it moves towards the zero line; however, in recent trading sessions, the Pi Network token has faced significant resistance around the $0.173 supply zone.

Should Traders Consider Selling?

While there is an ambiguous outlook on whether PI can breach the $0.17 mark in the near term, traders are encouraged to stay prepared. Current indicators do not support long positions, except for those engaging in quick trades. A retest of the $0.20 level could provide a more favorable risk-reward scenario for short positions compared to current levels. Moreover, a rally that exceeds $0.216 would require reassessing the bias towards a bullish outlook for swing traders.

Final Thoughts

Disclaimer: The information in this article is for informational purposes only and should not be considered as financial or investment advice. Always conduct your research before making trading decisions.