The Pi Network price suffered a harsh reversal this week after a highly anticipated news event fell short of expectations. The highly popular Pi Coin price plunged to a low of $0.86 on Friday, down sharply from this week’s high of $1.6673. This article explains why the Pi token crashed and whether it will recover this year.
Why the Pi Network price crashed this week
Pi Network, a crypto project that pioneered the concept of tap-to-earn, made headlines last week when it hinted of at important ecosystem news for Wednesday. The anticipation and hype pushed the token up by over 190%, making it one of the best-performing coins.
All this changed on Wednesday when the developers unveiled their big news. In a statement, they noted that they were launching Pi Network Ventures, a fund that will invest $100 million in startups leveraging its technology.
Market participants believe that the news was not all that important, as it did not address the main issues the network faces. These issues include the continued token unlocks, the lack of major exchange listings, and the dead ecosystem.
A Pi Network ecosystem makes sense if the developers want to attract world-class developers. That’s because all large crypto projects like Avalanche, Solana, Cronos, and BSC have grant programs that incentivize developers to build on them.
Read more: Pi Network price prediction: Top 3 reasons Pi Coin will surge soon
The Pi Coin price also dropped because of a situation known as buying the rumour and selling the news. This is a common situation where an asset price surges ahead of a major news event and then dump them when it happens.
Pi has also plunged because of the ongoing token unlocks that happened at a time of low demand. Data shows that the network will unlock over 1.45 billion tokens worth over $ 1 billion in the next 12 months and many more afterwards.
There are also concerns about the centralization of the network as the developers currently control everything and coins. Over 70 billion tokens are now controlled by the Pi Foundation, an obscure entity whose members are unknown.
Potential catalysts for the Pi Coin price
All hope is not lost for the Pi price as several potential catalysts that can boost its performance in the coming months. First, there is hope that it will be listed by at least one exchange soon. One of these is HTX, the crypto project overseen by billionaire Justin Sun.
The exchange has been posting daily cryptic X posts, hinting at a future listing. For example, in the X post below, HTX asked its members the next crypto that will jump on the rocket. Some of the tokens on the image are Pi Network, Moo Deng, Shiba Inu, and Dogecoin. Only Pi Network and World Liberty Finance have not been listed on its website.
Which crypto jumps on the rocket? 🚀
Pi Network price would also jump if the developers committed to decentralization. Full decentralization would reduce the risk that insiders will manipulate the price. Further, creating a robust ecosystem would help achieve that.
Is Pi Network heading towards full decentralization? Pi Network’s central coordinating node was recently deactivated, and a test was conducted in preparation for full decentralization. It now appears to have been permanently deactivated, signaling full decentralization.
As we predicted earlier, Pi will also rise if there is a crypto bull run. We cited the Bitcoin cup and handle pattern on the daily chart and the fading trade tensions.
Pi Network price technical analysis
The eight-hour chart shows that the Pi token price has crashed from a high of $1.6708 on May 12 to the current $0.8675. On the positive side, the token remains above the 50-period Exponential Moving Average (EMA).
It has also remained above the important support at $0.7795, the highest swing on April 12. Therefore, the token will likely have a break-and-retest pattern, a popular bullish continuation sign.
If this happens, it will likely retest the important resistance level at $1.50. A move below the support at $0.7790 will invalidate the bullish outlook.
Read more: Pi Network price nears $1: has the Pi Coin train left the station?
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