Last week, the PI token attempted a bullish breakout, breaking above a descending parallel channel that had capped its price for several weeks. 

However, the rally was short-lived. PI failed to hold onto its gains and quickly retraced, signaling what now appears to be a textbook dead cat bounce.

A dead cat bounce is a temporary, short-lived recovery in the price of an asset in a prolonged downtrend. It tricks traders into thinking a reversal is underway, only for the price to resume falling to new lows quickly. 

PI’s breakout looked like the start of a recovery following several weeks of decline. However, the failure to sustain the rally and the drop that followed confirms it was a dead cat bounce, with bearish momentum now threatening to push PI toward its all-time low.

Readings from the PI/USD one-day chart show its Balance of Power (BoP) at -0.84, indicating that sell-side pressure remains significant.

The BoP indicator measures the strength of buyers versus sellers in the market, helping to identify momentum shifts. When its value is positive, buyers dominate the market over sellers and drive newer price gains. 

Conversely, negative BoP readings signal that sellers dominate the market, with little to no buyer resistance. This confirms the sustained downward pressure and weakening investor confidence.

The negative BoP readings for PI reinforce the bearish outlook, suggesting that selling activity could continue unless new demand resurfaces.

Furthermore, PI’s Moving Average Convergence Divergence (MACD) indicator confirms the bearish bias against the altcoin.  At press time, PI’s MACD line (blue) rests below the signal line (orange).

The MACD indicator identifies trends and momentum in its price movement. It helps traders spot potential buy or sell signals through crossovers between the MACD and signal lines.

As with PI, when the MACD line rests below the signal line, it indicates bullish momentum, suggesting waning buying activity. Traders see this setup as a sell signal. Hence, it could exacerbate the downward pressure on PI’s price.

If the downward pressure persists, PI could slide even further, deepening losses for holders who bought into last week’s breakout. In this scenario, the altcoin’s value could revisit its all-time low of $0.40.

Conversely, if market sentiment shifts and buying activity spikes, PI Network’s price could rally to $0.66. 

The post Why PI’s Breakout Wasn’t What It Seemed: Network Nears All-Time Low appeared first on BeInCrypto.

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