Pi Network's Token Plummets 54% After 26.28% Surge

Pi Network's recent price surge on March 12, which saw the token gain 26.28% in a single day, has been followed by a severe downtrend. The token has since shed 54% of its value, raising concerns about the network's centralized nature and long-term sustainability. The project's 82.8 billion PI coin holdings have sparked debates about centralization and validator control.

The bearish sentiment is reflected in the market structure across various timeframes. The 4-hour chart shows a firm downtrend, with the Chaikin Money Flow (CMF) indicator below -0.05 for most of the past week, indicating steady capital outflows and selling pressure. The 20 and 50-period moving averages also capture this downtrend, with the 20SMA serving as dynamic resistance on the 4-hour chart. This suggests that a retest of the moving averages could see PI prices rejected in the coming days.

Technical analysis using Fibonacci retracement and extension levels suggests that PI is headed for $0.775 and $0.638 in the coming days. These levels are marked as take-profit levels for short sellers. The price bounce on March 21 turned out to be a rejection from the 78.6% retracement level at $1.14, and since then, PI has slipped below $0.86. The $0.65 support zone is of particular interest as it aligns with the lows from February 21, marking a key support level.

The Funding Rate has been persistently negative over the past week, indicating that short-sellers are paying a premium to long positions, which outlines bearish sentiment in the derivatives market. The Open Interest has been flat over the past four days, suggesting that market participants are content to stay sidelined as PI continues its steady downtrend. The findings suggest that a move to $0.775 and $0.638 is likely to occur in the coming days.

Investors looking to buy PI should wait for the trend to shift bullishly, as the market structure remains bearish across timeframes. The short-term price prediction is firmly bearish, with technical analysis marking support levels where bulls could force a price bounce. However, the current market conditions suggest that a further decline is more likely in the near term.