Pi Network (PI) edges higher by 4% at press time on Monday, extending its recovery for the third consecutive day after bouncing off the $0.2000 psychological level. Despite the short-term recovery, PI remains at risk of extended correction as outflows from the Pi Network Foundation wallet and liquidity reserve threaten further supply pressure.
Pi Network’s supply problem
Out of Pi Network’s 8.27 million circulating supply, the majority is off exchanges, according to PiScan data, which shows the total reserve of Centralized Exchanges (CEXs) at 417.20 million PI. This suggests that the majority of the selling pressure comes from off-exchange transactions.
Pi Network metrics. Source: PiScan
The outflow of 50 million PI tokens from Pi Network Foundation wallet #11 on Sunday resulted in strategic distribution within the community via Foundation Wallet #2. At the same time, the 50 million PI outflow from the liquidity reserve remains stagnant in a different wallet at press time. This increased outflow activity from Pi core team wallets risks adding to the available supply.
Pi Network transactions data. Source: PiScan
Technical Outlook: Will Pi Network extend the recovery?
Pi Network price dropped 13% on Friday, resulting in a fresh low of $0.1533 before retracing higher to close at $0.1996 on the day. At the time of writing, PI trades above $0.2150, hinting at a potential V-shaped reversal.
If the bounce back from the $0.2000 psychological level extends, PI could face a hurdle at $0.2755, marked by the centre Pivot Point level.
The Relative Strength Index (RSI) reads 28 on the daily chart, reversing within the oversold zone while the selling pressure remains heightened. The Moving Average Convergence Divergence (MACD) on the same chart inches closer to its signal line while maintaining a declining trend, hinting at a potential crossover. If MACD crosses above the signal line, it would flash a positive shift in trend momentum that could signal extended recovery.
PI/USDT daily price chart.
Looking down, crucial support levels for Pi Network remain at the $0.2000 psychological level and the S1 Pivot Point level at $0.1731.