Pi Network price has crashed below a crucial support level as the recent recovery lost momentum, and concerns about the upcoming unlocks rose. Pi, the recently launched token, dropped to $1.3340 on Sunday, down by over 55% from its highest level in February, giving it a market cap of over $9.7 billion.
Why Pi Network Price is Crashing
The Pi Network price has crashed in the past few days for three main reasons. First, there are concerns about dilution because of the planned token unlocks. Data by the Pi Network explorer shows that 7.22 billion tokens are in circulation against a total supply of 100 billion. This means that over 93 billion tokens will be unlocked over time.
The data shows that 188 million tokens will be unlocked this month, and many more will be released later this year. In total, Pi will unlock over 1.4 billion tokens later this year. Most of the unlocks will happen in 2027 and 2028. Token unlocks lead to more dilution by increasing the number of tokens in circulation.
Second, Pi Network price has crashed because of the ongoing weakness in the crypto industry. Bitcoin has dropped significantly, while the market cap of all coins has dropped by 3.65% to $2.75 trillion. Cryptocurrency prices often have a close correlation with each other.
The ongoing drop happened after several important US events last week. Donald Trump held a closely-watched crypto summit last week, where he unveiled plans for a strategic crypto reserve. As such, this decline is likely happening as investors sold the fact or the news.
Pi Coin Price Crashed After Forming a Head and Shoulders Pattern
Technically, the Pi token plunged from a high of $3 in February to a low of $1.35, its lowest level since February 23. This retreat happened after it formed a head-and-shoulders pattern, one of the most bearish patterns in the market. It has dropped below the neckline at $1.5020.
The Pi token has dropped below the 50-period moving average, while most oscillators, such as the Relative Strength Index (RSI) and the MACD, have pointed downwards.
Therefore, the coin is likely to have a strong bearish breakdown as sellers target the key support at $1.00. A drop below that level will cause it to fall to the lowest level after listing, which is about 50% below the current level. A move above the key resistance at $1.50 will invalidate the bearish view.
READ MORE: Aptos, Flare and Arbitrum Face Pressure Ahead of Token Unlocks
