Pi Network Token Price Gains, But Bearish Divergence Threatens Fresh Gains

Pi Network Token has increased by 2% in the past 24 hours, following the broader cryptocurrency market's upward trend. At the time of writing, this altcoin is trading at $0.63

However, despite this growth, an important technical indicator has shown a price divergence with its price, raising doubts about the sustainability of recent gains.

PI Token Price Increase Lacks Conviction

Reading from the one-day chart of PI/USD shows that the token's Chaikin Money Flow (CMF) is below the zero line and trending downward, forming a price divergence. At this point, the indicator stands at -0.10.

The CMF indicator measures money flow in and out of an asset to assess buying and selling pressure. When its value is negative while the asset's price increases, a price divergence occurs.

This trend indicates that the price increase is not supported by strong buying pressure. This suggests a lack of conviction behind the PI token's price surge and hints at a potential price correction.

Moreover, on-chain data reveals that PI continues to be negatively impacted by negative sentiment, increasing downward price pressure. According to Santiment, this index stands at -0.45 at the time of writing, with the negative value reflecting declining investor sentiment.

The weighted sentiment index analyzes social media and online platforms to assess the overall tone (positive or negative) surrounding a cryptocurrency.

When the index value is negative, it signals that the overall market sentiment towards the asset is bearish, with negative discussions and prospects outweighing positive ones.

This emphasizes PI's ongoing challenges, as the lack of investor optimism continues to hinder any significant price increases.

PI Approaches Important Resistance Level at $0.65

PI is currently trading at $0.63, approaching the resistance threshold forming at $0.65. If demand begins to decrease, this upward trend will witness a reversal and potentially trigger a price drop to $0.57.

However, if new market demand emerges and the current PI price increase receives support, it could break through the $0.65 resistance level and climb to $0.72.