Pi Network, Buoyed by Smart Contract News, Collapses Under a Massive Supply Bomb?

▲ Pi (PI)/ChatGPT generated image ©

Despite raising expectations for ecosystem expansion by introducing smart contract functionality to the testnet, the Pi Coin's price has fallen into a swamp of fierce downward pressure as the foundation dumped a massive amount of tokens onto the market.

According to the investment media FXStreet on April 22 (local time), Pi Network (PI) fell by about 3% the previous day and is currently trading around $0.1700 as of Wednesday, showing overall weakness within a descending channel pattern. Despite the positive news of a protocol upgrade, which included the introduction of subscription-based Smart Contract functionality, market buying pressure has been unable to absorb the massive supply unleashed by the foundation, leading to the price being suppressed.

Earlier, Pi Network announced the launch of its first smart contract functionality on the testnet as part of a protocol upgrade. The Mainnet, built on the Stellar blockchain, recently completed its upgrade to version 22 and aims to reach version 26 by June. The development team released a second Request for Comment (PiRC2) for technical review and community feedback on the subscription-based smart contract feature, expecting this feature, to be introduced with the version 26 release, to enhance token utility and increase investor confidence.

However, these technical advancements have been overshadowed by a massive supply bomb flowing from the foundation's wallet. As the second migration phase, which allows users who have completed Know Your Customer (KYC) verification to transfer tokens from the testnet to centralized exchanges (CEXs), is underway, the unlocked foundation supply continues to drag down the spot price. According to PiScan data, a staggering 30.54 million tokens were released from the foundation's wallet in the last 24 hours, overwhelmingly exceeding the 2.73 million tokens outflowed from exchanges, effectively neutralizing the market's attempts to absorb the supply.

Technical indicators also warn of the risk of further decline. Pi Network is trapped within a clear descending channel pattern on the daily chart, remaining below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), facing strong overhead resistance. Although the Moving Average Convergence Divergence (MACD) is still above the signal line, the positive bars on the histogram are shrinking, indicating a weakening bullish momentum. The Relative Strength Index (RSI) also hovers around 45, showing that recent upward attempts have lost momentum.

Experts have identified the low of $0.1633 on April 13 as a short-term downside support level. If this zone, adjacent to the descending support trendline, breaks down, it could trigger a cascade of declines to the February lows of $0.1556 and $0.1310. Conversely, if an upward reversal is attempted, the 50-day EMA at $0.1774 is expected to act as the primary resistance level, followed by the 100-day EMA at $0.1858, which is analyzed to serve as a strong ceiling.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*