Pi Network price crashed in April even as other cryptocurrencies like Bitcoin, Fartcoin, Virtuals Protocol, and Solana bounced back. The token dropped by over 16% in April and dropped by almost 80% from the highest point in February. This article examines the reasons behind the Pi Coin’s price crash and what to anticipate in May.
Why Pi Network price crashed in April
The value of Pi plunged in April for several reasons. First, the coin plummeted as many pioneers continued to dump their tokens following the mainnet launch in February of this year.
Second, the token crashed as concerns about dilution continued. Investors are concerned about the rising number of tokens coming online this year. Over 188 million tokens were released to the market in April.
This dilution is expected to continue in the coming years. Over 235 million Pi Network tokens valued at over $140 million will be unlocked this month. Additionally, over 1.43 billion tokens are valued at $869 million over the next 12 months.
Token unlocks are highly dilutive since they introduce new tokens to the market. The situation is even worse when there is not enough demand from investors. It is also worse when existing investors sell their coins, as is the case with Pi Network.
The value of Pi fell as exchange listings remained elusive
Third, Pi Coin price imploded as exchange listings remained elusive during the month. No major exchange has listed it, including Binance, a company whose customers voted overwhelmingly for its listing.
Pi Network is now listed in exchanges like OKX, MEXC, and Bitget. While these are all big exchanges, major names like Binance, Coinbase, and Upbit have not listed it. This means that the coin is not available to millions of customers.
Furthermore, the token plummeted as concerns about its tokenomics persisted. In addition to the future token unlocks, concerns have been raised that insiders hold the majority of the tokens and may easily dump them as happened with Mantra whose price crashed by over 90% within a day.
Pi Network has millions of pioneers, and according to its tokenomics, these ones hold over 65 billion coins. The remaining 35 billion coins are largely allocated to the insiders.
Ten billion goes to the foundation reserves, which the team controls. The team, headed by two people, also received 20 billion tokens, while the remaining 5% was allocated to liquidity, which the team also controls.
Why Pi Coin price may surge in May
While Pi Network price has crashed recently, there is a likelihood that it will bounce back by double or even triple digits in May.
The primary reason is that we expect at least one centralized exchange to list it. The most likely one is HTX, the exchange that Justin Sun acts as the advisor and shareholder.
HTX was the first exchange to launch a Pi Network IoU in 2021, a token that continued to trade until February. The exchange has been sending cues that it will list it soon. A look at its social media posts shows that PI has featured in at least three of them.
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An HTX listing would likely result in a significant increase in the value of Pi. However, the most consequential exchanges would be Binance, Upbit, and Coinbase. Binance is the largest exchange in the world, while Upbit holds a significant market share in South Korea. Coinbase would let US customers participate in the Pi Network.
Another reason the Pi coin price may surge is that it is currently in the accumulation phase of the Wyckoff Theory. This phase is characterized by sideways movement. It is then followed by the markup phase, where the fear of missing out (FOMO) reigns.
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