Pi Network Price Forecast: Recent spike tests channel breakout even as retail demand wanes
- Pi Network’s PI token ticks higher on Friday after a week of consolidation.
- PI flirts with a channel breakout that could further support price gains if confirmed.
- The surge in CEXs' wallet balances driven by user deposits indicates lowered retail demand, which weighs on buying pressure.
Pi Network (PI) appreciates over 3% at press time on Friday, marking the end of a week-long consolidation phase and teasing a potential channel breakout that would add to the possibility of further gains ahead. However, chances of a breakout are limited given the increase in Centralized Exchanges (CEXs) wallet balances, which indicates a decline in retail demand.
CEXs' reserve surge signals waning retail demand
A surge in CEX reserve relates to an increase in user deposits, suggesting a decline in investors’ confidence. PiScan data shows that the CEX wallet balances have increased by 2.01 million PI tokens over the last 24 hours, indicating that the retail demand is slowing down.
CEXs wallet balances. Source: PiScan
Pi Network eyes channel breakout to the 50-day EMA
Pi Network edges higher by over 3% at press time on Friday, testing the upper boundary of a falling channel pattern on the daily chart. The intraday recovery following the cool-off period of over a week hints at a potential channel breakout.
A decisive close above this trendline at $0.3610 would confirm the channel breakout. In this scenario, PI could face the 50-day Exponential Moving Average at $0.3836 as the next key obstacle.
Adding to the possibility of a trend reversal, the Moving Average Convergence Divergence (MACD) and its signal line hold a stable uptrend on the daily chart, indicating a steady rise in bullish momentum. Furthermore, the Relative Strength Index (RSI) has reached neutral levels close to 50, with the recent spike indicating a recovery in buying pressure.
PI/USDT daily price chart.
Looking down, if PI fails to close decisively and reverses from the overhead trendline, it could retest the all-time low of $0.3220 from August 1.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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