Pi Network’s price has continued to decline this week, largely driven by growing concerns over the rapid increase in token supply. The coin has dropped to a low of $0.60, marking a 21% decline from its monthly high and hitting its lowest level in a week.
Investors have responded by selling off, as many anticipate deeper losses if the tokenomics remain unaddressed. The underlying issue? An oversupply of tokens is entering the market.
Massive Unlocks Push Selling Pressure Higher
According to PiScan data, more than 105 million PI tokens will be unlocked this month alone. That figure doesn’t stand in isolation. Over the next 12 months, the project is expected to unlock an additional 1.57 billion tokens, averaging over 4 million new tokens per day, equivalent to $954 million at current valuations.
This rapid increase in supply comes at a time when demand has failed to keep pace, intensifying the risk of further price depreciation. Like traditional markets, cryptocurrency values react strongly to supply and demand dynamics. Just as a stock may tumble when a company dilutes its shares, a surge in crypto token circulation can send prices sharply lower.
Can Pi Network Counter the Oversupply Risk?
Fortunately, Pi Network’s team has potential tools to reduce the impact of dilution. One approach involves token burning—a mechanism that removes coins from circulation to drive scarcity and restore value.
The Pi Foundation currently holds over 70 billion tokens, valued at more than $40 billion. A strategic burning of a portion of these holdings could immediately shift market perception and curb further declines.
Another effective method would be to burn transaction fees generated within the network’s decentralised app (dApp) ecosystem. This strategy is a common approach in the cryptocurrency space. For instance, the BNB Chain has burned over $152 million worth of BNB tokens through this method.
Technical Indicators Flash Bearish Signs
A closer look at Pi Network’s 4-hour chart confirms growing downward pressure. The token recently fell from a resistance level of $0.7860, pulling back to $0.6085, a key support level that aligns with the ascending trendline drawn from the April 7 low.
Additionally, the coin has slipped below the 50-period moving average, a signal often interpreted as a loss of short-term momentum. The current price also sits at the first support level of the Woodie pivot point, heightening the probability of a breakdown.
If selling continues, Pi Network could fall further to $0.40, which represents a 35% drop from current levels. This level marks the lowest price recorded so far this month and could act as the next significant support.
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What Could Trigger a Reversal?
While the outlook appears bearish, two scenarios could halt the downtrend and send Pi Network’s price higher.
First, a tier-1 exchange listing—such as Binance, Coinbase, or Kraken—could instantly boost liquidity and demand. These platforms typically introduce coins to millions of new users, injecting fresh capital into the project.
Second, the Pi development team could implement aggressive supply control measures, such as a burning plan or reduced unlock rates, to restore investor confidence.
Either of these developments could shift market sentiment and drive a rebound above current resistance levels.
Final Thoughts: Can Pi Network Avoid the Drop?
The path forward for Pi Network largely depends on how the project addresses token supply and investor sentiment. Currently, the pressure from rising daily unlocks is undeniable, and unless mitigated, it could continue to push prices lower.
That said, the presence of a strong community, rising adoption in dApps, and the potential for major listings keep the door open for recovery. If the team responds with a credible tokenomics adjustment, the coin might rebound sooner than expected.
Until then, traders should closely monitor the $0.60 and $0.40 levels, as they represent key psychological and technical areas in Pi’s current price action.
Source: FX Crypto News / Digpu NewsTex