Pi Network falls below the neckline! Volume shrinks by 90%, double top pattern warns of a crash

The price of Pi Network has fallen from last month's high of 0.2821 USD to 0.2050 USD, a drop of 27%, officially entering a technical Bear Market. The 24-hour trading volume has plummeted to only 10.4 million USD. On the technical side, Pi Network has formed a double top pattern, with the neckline at 0.2036 USD. After breaking this level, the next target is 0.1530 USD, indicating an additional 25% of downside potential.

volume collapse reveals demand vacuum

The core of the current crisis for Pi Network lies in the complete shrinkage of demand. Data compiled by CoinGecko shows that the 24-hour volume has dropped to less than $10.4 million, which is a trivial number for a cryptocurrency with a market capitalization of $1.75 billion and a fully diluted valuation exceeding $2.6 billion. Comparing this volume to the market capitalization, the daily trading volume accounts for only 0.59% of the market cap, far below the 5-10% ratio that healthy crypto assets typically should have.

This kind of volume shrinkage is not achieved overnight. Over the past month, the trading activity of Pi Network has continued to decline, with daily trading volume dropping more than 90% from its peak of over 100 million dollars. This collapse reflects not only the weakening of short-term market sentiment but also suggests that investors' long-term interest in Pi Network is fading. When the volume is so weak, any large sell orders can cause drastic price fluctuations, which is exactly why the recent price trend of Pi Network is so fragile.

Compared to other mainstream cryptocurrencies, Pi Network's liquidity dilemma is more pronounced. Bitcoin's daily trading volume typically accounts for 2-3% of its market capitalization, Ethereum around 5-8%, and even smaller projects with similar market caps can maintain at least a 2-3% trading volume ratio. Pi Network's 0.59% ratio indicates that the market has almost completely lost interest in trading, which is an extremely dangerous signal.

Liquidity exhaustion also means that the price discovery mechanism fails. When both buyers and sellers are inactive, prices are more easily manipulated or experience irrational fluctuations. This also explains why Pi Network could experience a big dump of 27% in a short period, due to the lack of sufficient buying power to absorb the selling pressure.

Double Top Pattern Confirms Technical Bear Market

(Source: Trading View)

The daily chart shows that the Pi Network price has formed a double top pattern at $0.2821, with the neckline at $0.2036, which is the lowest point since November this year. The double top is one of the most common bearish patterns in technical analysis, usually appearing at the end of an uptrend, signaling that bullish momentum has exhausted and bears are beginning to dominate the market.

The price of Pi Network has fallen below the 50-day Exponential Moving Average (EMA), which is a clear signal of a trend reversal to bearish in the medium term. It has also broken below the Super Trend indicator, further confirming that the downtrend is still continuing. The Super Trend is a trend-following indicator based on the Average True Range (ATR), and when the price breaks below this indicator, it usually means that selling pressure has taken dominance.

The Relative Strength Index (RSI) has dropped from the overbought level of 70 to the current 41, indicating that momentum is rapidly fading. The RSI falling below the neutral line of 50 means that selling pressure has surpassed buying pressure, and while the current reading of 41 has not yet entered the oversold zone (typically below 30), there is still room for further decline. The MACD indicator has fallen below the zero line, which is another bearish confirmation signal.

According to the measurement rules of the double top pattern, when the price falls below the neckline, the theoretical target is the distance from the top to the neckline extended downwards by the same amount. Taking Pi Network as an example, the distance from $0.2821 to $0.2036 is approximately $0.0785, so the target after falling below the neckline should be $0.2036 - $0.0785 = $0.1251. However, analysts more conservatively predict that the next key support level is at $0.1530, which is the lowest point in October of this year and about 25% lower than the current level.

On the other hand, if the price unexpectedly rebounds and breaks through the key resistance level of $0.2300, the bearish outlook will fail. However, against the backdrop of current demand exhaustion and a comprehensive technical shift to bearish, the likelihood of such a reversal is relatively low.

Three Structural Dilemmas Facing the Pi Network

1. Lack of listing on mainstream exchanges

· Not listed on top exchanges

· Liquidity is concentrated on second and third-tier platforms, with extremely poor depth.

· Restrict institutional investors and retail participants from participating channels

2. Continuous Token Unlock Dilution Market Value

· The total circulation continues to increase, and supply pressure is accumulating.

· Early miners have a strong willingness to sell, creating persistent selling pressure.

· Lack of effective tokenomics design to balance supply and demand

3. Mainnet delay damages confidence

· The mainnet is expected to go live in Q1 next year and has been delayed multiple times.

· DEX and AMM only operate on the testnet, with limited practical application value.

· Slow development progress undermines the confidence of long-term holders

Whale Control Risk and Retail Investor Dilemma

The largest whale in the Pi Network resumed buying two days ago, transferring 3.48 million tokens from OKX to his own account. He currently holds over 394 million tokens, worth more than 80 million USD, making him the largest holder of Pi. This figure represents a significant proportion of the total circulation of the Pi Network, meaning this whale has a huge influence on the price.

The buying behavior of whales is often interpreted by retail investors as a bullish signal, but it can also be a double-edged sword. On one hand, the continuous buying by whales shows that large funds still have confidence in the Pi Network; on the other hand, such concentrated holdings mean that once whales change their minds and start selling, the market will face a catastrophic collapse. In a situation with such thin liquidity, the selling pressure of 394 million tokens is enough to crash the price by half or even lower.

For retail investors, this kind of whale control situation is extremely unfavorable. Ordinary investors cannot know the true intentions and timing of the whales' operations, and can only passively accept price fluctuations. Moreover, when whales sell off, retail investors often cannot exit in time due to insufficient liquidity, becoming the final bag holders.

Despite the developers continuing to roll out upgrades to the Stellar Protocol 23, which may be realized in the first quarter of this year, these technological advancements have failed to reverse market sentiment. The Pi Network faces numerous challenges, including the lack of listings on major exchanges and ongoing token unlocks leading to an increase in its circulating supply, which are structural issues that are more likely to determine price direction than short-term technological upgrades.