Can Pi Network’s bulls enforce a reversal in the face of steady selling pressure?
Weak demand for the token and a feeble bullish reversal pattern do not set PI up for success.
- PI saw bullish momentum on the 4-hour chart, but a lack of demand has remained a persistent issue
- $0.66 and $0.8 levels were the next sizeable obstacles for the Pi Network token
Pi Network [PI] has retraced almost all the gains it made earlier in May. In the beginning of June, it was trading at the low from three months ago as the bulls appeared infirm. At the time of writing, the Fibonacci retracement levels showed that the $0.8-level was the next key resistance on the 1-day timeframe.
Early May saw PI post a 188% bullish move, followed by a 63% price drop that saw all the gains made in May erased. This volatility could scare investors away.
The Pi Network token might struggle to recover
On the 12-hour chart, the token appeared to form a descending wedge pattern. Such a pattern generally heralds the end of a downtrend. A move beyond the upper trendline of the pattern would be expected to see a strong rally.
However, the wedge pattern on the PI chart had some problems. The two trendlines were not tested often enough, especially the lower one. From 20-29 May, a large blank space was seen on the lower side of the pattern.
Hence, the chances were that the wedge pattern wasn’t a clean one, and investors should not expect a swift recovery yet. The MFI showed that momentum remained bearish, and the OBV noted slow selling volume behind the Pi Network token over the past ten days.
On the 4-hour chart, the descent of the OBV over the past week was made clear. It highlighted the selling pressure on PI that forced it to test the lows made on 8 May. At press time, the Pi Network token was trying to scale the $0.66 resistance level.
This effort might not succeed for a while. Especially since the OBV has not reversed its downtrend yet. Though the MFI showed bullishness, without steady demand, PI will likely fail to flip the $0.66 level to support.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
