The Pi Network price has been moving sideways over the past few days. It has flatlined at $0.60, where it has been stuck 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 entered a strong bear market, which brought it to its current price of $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.
The Pi coin price made a breakout recently and surged to a high of $0.7860, up 100% from its lowest point this month. It then encountered substantial resistance at $0.7860 and pulled back to its current level of $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 that it continues to fall as sellers target this month’s low of $0.40.
The alternative scenario is where the coin bounces back, as 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.
Pi Coin Tokenomics Risk
The main risk that the Pi Network price faces is its tokenomics. First, 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 fears of dilution by saying that the supply brought online will decrease 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 manage the 5% allocated for liquidity purposes.
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