Why could the unlocking of 275 million tokens by Pi Network drive the price to the bottom?

PI Network is preparing to unlock more than 250 million tokens in June, a move that could significantly increase the selling pressure weighing on this altcoin.

With technical indicators showing that investor interest is gradually decreasing, PI could slide down to an all-time low of $0.4 or even lower.

Pi Network prepares for the unlocking event in June

According to data from PiScan, Pi Network is expected to unlock 276 million PI tokens in June. Based on market price, these tokens are currently valued at approximately 176 million dollars.

Unlocking Pi Statistics | Source: PiScanWhen market participants are cautious due to continuously weakening prices and low trading volume, this unlocking event may be particularly disruptive. Overall, the influx of tokens will lead to increased sell pressure, especially when investor sentiment is pessimistic and there is insufficient demand to absorb the new supply.

This is exactly the case for PI, as the indicators from the daily chart show signs of continued capital outflow. For example, the relative strength index (RSI) of the token is trending downwards and is below the neutral line of 50 at 40.49.

! PI's RSI | Source: TradingViewThe RSI indicator measures the overbought and oversold market condition of an asset. This indicator ranges from 0 to 100. Values above 70 indicate that the asset is overbought and is about to fall in price, while values below 30 indicate that the asset is oversold and may recover.

The RSI indicators of PI show that market participants prefer distributing rather than accumulating. If this trend continues, the price may continue to slide.

Moreover, the Aroon Down line of the token is at 86%, confirming the strength of the downtrend. The Aroon indicator is used to determine the direction and strength of the trend. When the Aroon Down line is close to 100%, it indicates that recent price action has consistently reached new lows, demonstrating strong bearish momentum.

Aroon Down of PI | Source: TradingViewAt 86%, the Aroon Down of Pi indicates that the asset has created a low with high frequency, with very few or no corrections recorded recently.

Pi price slips to $0.4 — Incident or recovery?

At the time of writing, PI is trading at $0.65. With stronger selling pressure, the bears may push the price down to the all-time low of $0.40.

If this support level cannot be maintained, the price may drop to a new low.

Pi price chart | Source: TradingViewHowever, new demand will negate this bearish outlook. In that scenario, PI could recover and rise to $0.86.

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