Pi Network's bullish sentiment surges with ETP debut, but token unlock poses risks
- Pi Network ranked among assets with the strongest bullish sentiment on Friday.
- Nordic exchange Valour launches eight different ETPs, including Pi Network.
- Pi Network braces for 159.5 million token unlock in September.
Pi Network (PI) takes a breather on Friday, following a 5% rise on Thursday, to bounce back from its all-time low levels. The launch of a PI-focused Exchange Traded Product (ETP) fuels the possibility of a bullish rebound underpinned by the RSI divergence. However, 159.5 million tokens are scheduled to unlock in September, which could boost the supply pressure.
The first-ever Pi Network ETP launch
Valour, a subsidiary of the London Stock Exchange (LSE) listed DeFi Technologies, announced the launch of eight new crypto-focused ETPs. Capturing the attention of Pi Network users, commonly referred to as Pioneers, was the Pi-focused ETP, Valour Pi (PI) Swedish Krona (SEK) ETP.
Pi Network’s bullish sentiment is on the rise with the launch of the first-ever ETP. CoinMarketCap ranks Pi Network among the top 10 crypto assets with the strongest bullish sentiment over the last 24 hours, with an 87.7% bullishness rating.
Most bullish sentiment crypto projects. Source: CoinMarketCap
Supply dump risks amid September token unlock
PiScan data shows nearly 159.5 million PI tokens will be released into circulation in September through daily unlocks. This massive token unlock could increase the overhead supply pressure on PI, risking further losses.
Pi token unlock. Source: PiScan
However, the launch of the recent Linux version of Pi Node and the Pi ETP has increased confidence, which could decrease the supply dump chances.
Pi Network eyes a leg higher in the falling channel pattern
Pi Network trades at $0.3578 at press time on Friday, having risen from an intraday low of $0.3521. The short-term rise increases the possibility of a bullish extension to the 5% rise from Thursday, which would mark an upcycle within the falling channel pattern on the daily chart.
A potential uptrend continuation in Pi coin could target the 50-day Exponential Moving Average (EMA) at $0.4096.
The momentum indicators on the daily chart suggest a steady rise in a bullish trend. The Relative Strength Index (RSI) reaches 44, indicating a slow rise from the oversold region, which suggests enduring growth in buying power.
Additionally, the Moving Average Convergence Divergence (MACD) diverges from its signal line to avoid a cross below. This indicates a revival in bullish momentum.
PI/USDT daily price chart.
Looking down, if Pi slips under the $0.3442 level, marked by the August 5 close, it could test the all-time low of $0.3220 from August 1.
Open Interest, funding rate FAQs
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Author
Vishal Dixit
FXStreet
Vishal Dixit holds a B.Sc. in Chemistry from Wilson College but found his true calling in the world of crypto.
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