Tokens unlock but demand is low

The Pi Network price has crashed for three consecutive days and is hovering near its all-time low as token unlocks continue and demand wanes.

Pi Coin (PI) token dropped to $0.1330 on Wednesday, down by 96% from its all-time high. In other words, the token has erased billions of dollars in value.

The ongoing crash coincided with the broader crypto market crash, which has affected Bitcoin and other altcoins. Data shows that the market capitalization of all tokens dropped by over 2.30% in the last 24 hours to $2.2 trillion.

The decline continued after the United States published strong jobs numbers. Data by the Bureau of Labor Statistics showed that the economy added 130k jobs in January, much higher than the expected 70k. The strong jobs report means that the Federal Reserve may not cut interest rates soon.

Pi Network price has also crashed amid the ongoing token unlocks. Data compiled by PiScan shows that the network will unlock 205 million tokens worth over $27 million in the remainder of the month. Most of these tokens will happen in the next two days, when the network will release over 37 million tokens.

Pi Network will unlock an additional 1.3 billion tokens over the next 12 months, substantially increasing the circulating supply. In most cases, token unlocks lead to lower prices, especially when the demand is weak.

The supply will increase in March when the developers launch the KYC validator rewards distribution. Most of the validators will likely dump their rewards into the market.

Meanwhile, more data show that Pi Network’s demand continued to fall. Data compiled by CoinMarketCap shows that the volume dropped to over $11 million in the last 24 hours.

A potential catalyst for higher prices is Kraken’s listing. The company has listed it in the chain category of its listing roadmap.

Pi Network price prediction: Technical analysis 

The daily timeframe chart shows that the Pi Coin price has plunged since its mainnet launch in February. It has crashed below the important support level at $0.1537, where it formed a double-bottom pattern. A double bottom is one of the most common bullish reversal patterns in technical analysis.

The coin has moved to the lower side of the Bollinger Bands tool, a sign that bears are in control. Also, the Average Directional Index has jumped to 70, a sign that the downtrend is gaining momentum.

Therefore, the coin will likely continue falling as bears target the next key support level at $0.100. This view will be invalidated if it moves above the key resistance level at $0.1537.