Pi Network (PI) was trading near $0.187, with an increase of over 40% on a weekly basis, on February 19th, according to CoinMarketCap data, as traders prepare for the project’s first mainnet anniversary. According to TradingView charts, PI reclaimed a key Fibonacci support level with a rising volume of trades. This puts the $0.20 resistance level in focus for a potential breakout.
The token briefly rose to a 4-week high of $0.205 before it consolidated. Reduced token unlocking pressure has resulted in a tighter circulating supply and increased price sensitivity to major resistance levels.
Falling Wedge Suggests Bullish Trend
TradingView daily charts depict PI breaking through a long-term falling wedge that developed between the end of November and early February. A falling wedge often suggests “bearish exhaustion.”
Breaking above the upper trendline of a falling wedge with strong volume signals a potential bullish reversal. It also indicates a shift from distribution to accumulation.
The impulse moves broke price action from the $0.13 area toward $0.20 and returned PI price above the 20-day Exponential Moving Average (EMA). The 20-day EMA will be acting as a dynamic support going forward.
Source: TradingView
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Pennant Formation Indicates Bullish Trend to Continue
After the breakout, PI established a bullish pennant formation with a flagpole and a tight consolidation phase. In the consolidation phase, there were rising volumes on the upward candles, which is one of the confirmation signals for a continuation signal.
The momentum indicators also confirm this setup. The RSI has remained above the 50 line. The MACD recently completed a bullish crossover in the daily chart, and indicates an increase in demand (buying pressure).
MACD and RSI. Source: TradingView
Resistance Zones Confirm a Breakout
As of now, PI is trading above the 61.8% Fibonacci retracement zone of approximately $0.184, and this represents a valid trend confirmation zone. Immediately above this zone, there is the first resistance zone at approximately $0.198 and $0.200.
A confirmed closing price above these resistance zones will represent a confirmation of the breakout from the pennant. It will also open the path to the next resistance zone at approximately $0.212, which coincides with its monthly high.
The zone of approximately $0.174 is a key area where a potential breakout failure would occur and break down the bull trend. If a daily close occurs below this zone, the bull trend could possibly be weakened, and send the price back to the previous consolidation zone.
Near-Term Catalyst Emerges
In addition to the current technical indicators, there is a near-term catalyst for the price, with the first mainnet anniversary approaching. There is less selling pressure occurring because unlock activity has been reduced compared to previous months, per Pi Scan data.
However, exchange listing opportunities, such as on Kraken, are still under internal review. They could positively impact the token’s price, but have not been confirmed yet.
Why Does This Matter?
If the price of the Pi Network token can remain above $0.20, the bull trend continuation will be validated and will position the price for an uptrend toward $0.212.
Also Read | Pi Network Faces Selling Pressure On 82M Token Unlock
