Pi Network (PI) has surged more than 70% in the past 24 hours, pushing its market capitalization to $16 billion and trading volume to over $2.3 billion in the past 24 hours.

Although reaching a new ATH near $3, this technical divergence suggests a volatile path ahead for PI. Traders are closely watching as this token moves between bullish momentum that could push it to $4 and warning signs that could trigger a correction to the lowest support level of $1.7 or even $0.79.

Pi Network's DMI shows a very strong uptrend

Pi Network's Directional Movement Index (DMI) is showing significant momentum, with the Average Directional Index (ADX) spiking to 57.7 from just 12.3 a day earlier.

ADX is a critical technical indicator that measures the strength of a trend regardless of its direction. Values below 20 usually indicate a weak trend, 20-40 show an average trend, and values above 40 signal a strong trend.

This significant increase in Pi's ADX from the weak to the very strong zone indicates a considerable strengthening of the underlying trend's strength.

Complementing this spike in ADX, Pi's Positive Directional Indicator (+DI) has surged to 40.9 from 14.6 two days ago, while the Negative Directional Indicator (-DI) has dropped sharply to 1.1 from 19.4 over the same period.

When +DI is significantly higher than -DI, as is currently the case with Pi, this confirms a strong uptrend. The combination of a high ADX value with a large spread between +DI and -DI suggests that Pi Network is experiencing an exceptionally strong uptrend with minimal selling pressure.

If these technical signals maintain their current configuration, they may indicate continued price appreciation for Pi in the short term, as the market appears to be under strong buying control with minimal resistance.

PI BBTrend remains negative despite the price increase

Despite the strong price increase, Pi's Bollinger Bands Trend (BBTrend) indicator has dropped sharply to -11, marking a significant decline from the 51.2 level just three days ago, after oscillating between 1 and 3 over the past few days.

The BBTrend indicator is a specialized technical tool that measures price movement relative to the Bollinger Bands. It primarily quantifies how prices are trending within these channels based on this volatility.

Positive values indicate price movement up relative to the bands, while negative values show movement down or back towards the middle band.

The sharp drop to -11 in Pi's BBTrend may signal that the current uptrend is becoming overbought and is likely to undergo a correction or consolidation phase.

When BBTrend turns significantly negative after a price rally, it often indicates that the asset has moved too far too fast and is now trading at levels that may not be sustainable in the short term.

This technical warning sign suggests that Pi may experience a pullback towards the middle Bollinger Band, a sideways consolidation phase, or at least a slowdown in its bullish momentum.

Can Pi Network reach $4 by March?

The Pi Network price has reached a new ATH just hours before its price approached the $3 mark for the first time.

With this strong momentum, Pi may continue to rise, breaking above the psychological $3 level and testing higher resistance levels at $3.5 or even $4 in the short term.

This impressive rally indicates increasing market interest and buying pressure that could sustain growth if the positive sentiment continues.

However, as indicated by the negative BBTrend, this rally may have become overbought and is at risk of reversal. If this bearish technical signal translates into price action, Pi may undergo a significant correction, initially dropping to test the $1.7 support level.

If this level fails to hold, the likelihood of a decline to $1.42 will be higher as selling pressure increases.

In the event of a strong downtrend, Pi's price could drop even further to $0.79, which would be the lowest level in five days and a significant correction from the current highs.