Pi Network's cryptocurrency has fallen nearly 40% from its February peak of $2.99, though technical indicators suggest a potential recovery may be underway.
The digital asset's price action over the past two weeks reveals a complex technical picture. While buying pressure has surged in recent days, declining trend strength measurements suggest the recovery may face obstacles. The cryptocurrency is currently attempting to establish support around the $1.57 level after its significant decline.
Technical analysis of Pi's Directional Movement Index (DMI) shows the Average Directional Index (ADX) has declined to 30.6 from 36.5 over a two-day period. "ADX measures trend strength, with values above 25 generally indicating a strong trend, while values below 20 suggest a weak or consolidating market," market analysts note. This drop indicates that while Pi remains in an uptrend, the momentum supporting this movement is softening.
The Directional Indicators paint a more bullish picture in the immediate term. The positive directional indicator (+DI) has surged to 27.3 from 12.3 two days prior while remaining stable since yesterday. Simultaneously, the negative directional indicator (-DI) has sharply dropped to 14.9 from 29.3. This shift indicates that buying pressure has significantly overwhelmed prior selling pressure.
"A rising ADX signals strengthening momentum, whereas a declining ADX suggests a weakening trend, even if price action continues in the same direction," according to technical analysis principles. Given the stable +DI and declining ADX, the strong buying momentum seen earlier appears to be fading.
Pi's Relative Strength Index (RSI) tells a similar story of recovery that may be approaching its limits. The indicator has climbed sharply to 60.90, up from 34.8 yesterday and a deeply oversold 19.5 reading four days ago. This rapid rise suggests a strong shift in momentum, with buyers regaining control after the sell-off.
The RSI's approach toward overbought territory presents a critical juncture for the cryptocurrency. Pi hasn't surpassed the 70 RSI threshold since February 27, suggesting this level has historically acted as a barrier that triggers profit-taking. If the RSI stabilizes near its current level, Pi could enter a consolidation phase before potentially moving higher.
Price action analysis shows Pi trading within a key range, facing immediate resistance at $1.82 while holding support at $1.57. A breakthrough above $1.82 would target $1.98 as the next resistance level. Should buyers maintain pressure and break above these barriers, Pi could extend its recovery toward the $2.35 mark, significantly improving its technical outlook.
The downside risk remains substantial, however. If Pi fails to maintain its support at $1.57, it could experience further declines toward $1.35. Increased selling pressure could push the cryptocurrency even lower to $1.23, representing a deeper correction from its February highs.
Market participants are closely watching these technical developments as Pi attempts to reclaim lost ground. The strength of support at $1.57 will be crucial in determining whether the current uptrend holds or if Pi enters a more extended correction phase in the coming days.