The price of Pi Network (PI) continued its downward trend this week, slipping to a low of $0.60, down 21% from its monthly high. Market analysts are warning of a potential further decline, citing token oversupply and weak demand as the primary culprits.
Supply Surge Sparks Investor Caution
At the heart of the price drop is a significant increase in circulating supply. According to PiScan, over 105 million tokens are set to be unlocked this month alone, with an additional 1.57 billion PI to be released over the next 12 months. That’s an average of 4 million new tokens entering the market each day—a combined value of more than $954 million at current prices.
Like any market, cryptocurrency prices are driven by supply and demand. When supply balloons without corresponding demand, the result is downward pressure on price. This dynamic is not unique to crypto; in traditional finance, stock prices often fall when companies issue new shares.
Possible Solutions: Token Burns and Fee Reduction
To counter this inflationary pressure, the Pi Network team could consider mechanisms to reduce supply. One option is a large-scale token burn. On-chain data shows the Pi Foundation holds over 70 billion tokens, valued at more than $40 billion. A burn of a portion of these tokens could help boost scarcity and support price recovery.
Another potential solution would be implementing a fee-burning mechanism within Pi’s decentralized app (dApp) ecosystem. This strategy is used by other networks such as BNB Chain, which has burned over $152 million worth of BNB using similar methods.
Technical Outlook: A Bearish Breakout Ahead?
From a technical perspective, Pi’s 4-hour chart indicates a troubling trend. After attempting to break resistance at $0.7860, the coin has fallen back to $0.6085—a crucial support level tied to the ascending trendline from April 7. It’s also hovering just below the 50-period moving average, a bearish signal.
The next key level to watch is $0.40, which marks the lowest price point this month. If Pi breaks below current support, this would imply a potential 35% decline from its present level.
Could a Rebound Be Possible?
Despite the bearish outlook, a reversal remains possible if key bullish catalysts emerge. A tier-1 exchange listing or an official roadmap addressing token inflation could restore investor confidence and spark a price recovery.
Final Thoughts
Pi Network’s price action reflects broader concerns about token economics. With billions of dollars’ worth of tokens set to flood the market, investor focus has turned to supply control and developer strategy. Without decisive action, the risk of further decline remains high.
