The Pi Network price has recently shown signs of a bearish trend, forming a high-risk chart pattern that could lead to further declines. This pattern, known as a bearish pennant, has emerged on the daily chart, raising concerns among traders and investors about the future direction of the Pi coin.
Bearish Pennant Pattern Analysis
A bearish pennant is a continuation pattern that typically indicates a further decline after a period of consolidation. It is characterized by a long vertical line followed by a symmetrical triangle, formed as the price moves within a narrowing range. In the case of Pi Network, this pattern has formed well and is approaching its confluence level, suggesting a potential breakout to the downside.
Adding to the bearish sentiment, Pi Network has also moved below the 50-day Exponential Moving Average (EMA), a key indicator used to assess the strength and direction of a trend. The Moving Average Convergence Divergence (MACD) indicator has also dropped below the zero line, reinforcing the bearish outlook.
Key Levels to Watch
If Pi Network price breaks below the ascending trendline that connects the key down-swings since September, it could signal a further decline. This would likely lead to a drop to $37, the lowest level seen on October 15, representing a 30% decrease from the current price.
On the other hand, a move above the critical resistance level at $57.5 would invalidate the bearish view. This level represents the upper boundary of the pennant’s triangle. A break above this resistance could pave the way for a bullish reversal, potentially pushing the price up to $73, the 61.8% Fibonacci retracement level.
Impact of Pi Coin Mainnet Launch Delays
One of the main factors contributing to the bearish outlook for Pi Network is the uncertainty surrounding the mainnet launch. The developers recently announced a postponement of the grace period for KYC verification from November 30 to December 31. This delay has cast doubt on whether the mainnet launch will occur as planned this month.
The mainnet launch is crucial because it will allow pioneers to convert their Pi coins into fiat currencies. During the enclosed mainnet period, it is impossible to cash out these coins, which has created anticipation and speculative trading around the potential launch. The Pi Network IoU, which is not officially affiliated with the main Pi Network team but is listed on HTX, has been used as a proxy for the Pi Network token, reflecting market sentiment.
Conclusion
The Pi Network price is at a critical juncture, with the formation of a bearish pennant pattern and a move below the 50-day EMA signaling potential downside. The uncertainty surrounding the mainnet launch adds to the risk, making it essential for traders to closely monitor key levels and developments. A break below the ascending trendline could lead to a significant decline, while a move above the $57.5 resistance could invalidate the bearish outlook and signal a potential bullish reversal. As always, investors should stay informed and consider the inherent risks when trading in volatile markets.
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