The Pi Network price has moved sideways in the past few days. It has flatlined at $0.60, where it has been stuck at since last week. It has crashed by 80% from its highest level after its mainnet launch. This article highlights why Pi coin is our chart of the week amid rising tokenomics concerns.
Pi Network Price Prediction
The eight-hour chart shows that the Pi coin price peaked at $3 shortly after its mainnet launch in February. It then moved into a strong bear market that brought it to the current $0.6250.
Pi Network price formed a falling wedge pattern as it dropped. This pattern consists of two falling and converging trendlines. It usually leads to a strong bullish breakout when the two lines are about to meet.
Pi coin price made this breakout recently, and surged to a high of $0.7860, up by 100% from its lowest point this month. It then found substantial resistance at $0.7860, and then pulled back to the current $0.6250.
Pi has formed a small head and shoulders pattern, and is below the 50-period moving average. Therefore, the most likely scenario is where it continues falling as sellers target this month’s low of $0.40.
The alternative scenario is where the coin bounces back since it has formed a double-bottom pattern at $0.6040. A double bottom is one of the most bullish signs in the market. Such a move would push it to the key psychological point at $1.
Read more: ‘It Could Get Ugly’ – Fed Warning May Hit Solana, Pi Network, Shiba Inu, Polkadot
Pi Coin Tokenomics Risk
The main risk that Pi Network price faces is its that of its tokenomics. In the first place, data shows that millions of new tokens will come online in the next few years. Precisely, 1.5 billion tokens will be unlocked in the next 12 months. These tokens are equivalent to 4 million tokens a day.
The developers have attempted to allay dilution fears by saying that the supply brought online will drop over time. However, the tokenomics means that the team holds most of the tokens, which could lead to a Mantra-like collapse if they decide to liquidate.
There are millions of pioneers in the Pi Network. All these pioneers are allocated 65 billion tokens. The rest are allocated to the foundation reserves, liquidity, and core team.
The core team receives 20 billion tokens, while the foundation has 10 billion tokens. Analysts believe that the foundation and the core team are the same thing. The team and the foundation then control the 5% that are allocated to for liquidity purposes.
