Pi Network price bounced back during the weekend as investors bought the dip following the 85% crash from its peak. The token peaked at $0.7940 on Saturday, up sharply from the year-to-date low of $0.4023. Still, it remains sharply lower than the all-time high of near $3.
Why Pi Network price crashed
There are a few reasons why the Pi Network price plunged after its highly anticipated mainnet launch in February.
First, the crash mirrored that of other recently launched tokens. For example, a token like Grass, jumped initially and then retreated and has never recovered. The same is true with other tokens like Wormhole, Hamster Kombat, and ZkSync.
Second, the Pi Network mainnet launch coincided with a difficult period in the market when most tokens were crashing. Bitcoin has remained below $90,000, down sharply from the all-time high of $109,200. Other tokens like Berachain, Polkadot, and Solana have done worse.
Third, the Pi Network price crashed as investors reacted to its relatively weak ecosystem. The idea behind Pi was that it would have a highly vibrant ecosystem of applications that will promote commerce, gaming, and other areas. Applications in the network have not done well since then.
A good example of this is the recently launched Pi domains, which the developers are auctioning. Pi holders have placed 110,840 bids currently worth $1.84 million. While this is a good number, it means that only a tiny number of pioneers have placed their bid. Pi had over 10 million pioneers during its mainnet launch.
Read more: Pi Network price prediction: is it safe to buy the Pi coin dip?
Exchange listings, pioneer sales, and dilution
There are other reasons why the Pi Network price has imploded. For one, many mainstream exchanges have refused to list it, with some, like Bybit, arguing that it was a scam. Pi’s developers have rejected these claims, and pointed to the network’s transparency.
A Pi Network exchange listing by companies like Binance, Coinbase, and Upbit would help to push its price much higher than it is today.
Further, there are substantial concerns about its dilution, which are caused by its token unlocks. Over 1.55 billion Pi tokens are expected to be unlocked in the next 12 months, with more billions set for the following years.
Pi can allay these fears by simply burning most of its tokens. That’s because the Pi Foundation currently holds over 73 billion tokens with a diluted value of $47 billion, meaning that it can afford to buy some of them.
Finally, the Pi Network token crashed as many pioneers who were mining the token for years sold their allocations after the mainnet launch.
Pi Network price technical analysis
The Pi coin price will likely have a sustained recovery in the next few days. That’s because its recent crash happened as it was forming a falling wedge pattern, a popular bullish reversal sign.
The two-hour chart above shows that the token formed two descending and converging trendlines. Its rebound happened when the two lines neared their confluence levels.
Pi coin also formed a bullish divergence pattern, which happens when an asset is dropping as some of its top oscillators rise. Therefore, the token will likely keep rising as bulls target the important psychological point at $1. Such a move would point to a 72% increase from the current level. A drop below last week’s low of $0.4142 will invalidate the bullish outlook.
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