PI Drops 50% in One Week – Why Traders Should Prepare for Further Drop

PI has lost half of its value in the past seven days, showing an increasingly deep bearish sentiment among small investors. At the time of writing, this altcoin is trading at 0.72 USD, marking a significant drop from the previous week's high of 1.67 USD.

Technical indicators suggest that the downward trend may not have ended as selling pressure remains substantial.

PI Faces Strong Selling Pressure

PI's BBTrend remains in the red zone on the daily chart, confirming that downward forces are strongly in control. Observed on a daily chart, the indicator is currently at -19.36.

BBTrend measures the strength and direction of a trend based on the expansion and contraction of Bollinger Bands. When the BBTrend value is positive, it signals a strong upward trend, while a negative value indicates an increasing downward price movement.

PI's negative BBTrend shows that its price continuously closes near the lower Bollinger Band, reflecting prolonged selling pressure and suggesting the possibility of continued price decline.

Moreover, the Token's Elder-Ray index also supports this bearish perspective. At the time of writing, this indicator returns a negative value of -0.12.

The Elder Ray index measures the strength of buying and selling pressure in the market, using two main components: Bull Power and Bear Power.

When this index is negative, sellers dominate the market. This signals a downward trend and suggests continued decline for PI.

Resistance at 20-Day EMA Limits Recovery Hopes

The PI Token is trading below the 20-day exponential moving average (EMA), creating an overhead dynamic resistance. The 20-day EMA measures the Medium price of an asset over the most recent 20 trading days, with greater weight given to recent prices.

When an asset trades below the 20-day EMA, recent price action is weaker than the short-term trend. This is a bearish signal indicating a lack of buying momentum.

If the trend continues, PI could drop to 0.55 USD.

On the other hand, if buying pressure suddenly increases, the PI Token could recover and rise to 1.01 USD.