Pi Network price has imploded this month, erasing most of the gains it made in February after the much anticipated mainnet launch. The Pi coin token has collapsed to a low of $0.920, its lowest level since February 22. It has dived by about 70% from its highest level this year, shedding billions of value. So, what can save the crashing Pi coin?
Pi Network price crashes amid dilution challenges
The biggest challenge facing the Pi Network is its dilution, as billions of new tokens are set to come online in the next few years. That’s because Pi coin has 6.82 billion tokens in circulation, much lower than the maximum supply of 100 billion. This means that the remaining 93.8 billion tokens will come online at some point.
Data shows that the Pi Network will unlock 118 million tokens this month and 182 million of them in April. 222 million of these tokens will be unlocked in May, followed by 233 million in June. Altogether over 1.6 billion tokens will unlocked in the next twelve months.
Pi Network unlock statistics
Token unlocks are usually highly dilutive since they introduce more coins at a time when there is not enough demand.
There are a few things that the Pi Network can do to allay these fears. The most important one is to introduce burning, a process where tokens are removed from circulation and moved to an inaccessible address.
How Pi Network can burn its tokens
Pi Network has various options to burn these tokens. First, the network can decide to incinerate the tokens of pioneers who did not move their coins to the mainnet. It is unclear what this number will b, but chances are that it will be a big one since less than 15 million pioneers have migrated their tokens to the mainnet.
The other option is to do what other large blockchain networks do. In most cases, blockchain networks like Tron and Shiba Inu burn the fees generated by the ecosystem. In Pi Network’s case, it aims to become a major player in the payment industry. Some of the ecosystem fees can be moved to the dead wallet.
Finally, the founders can burn some of their tokens. Data shows that the Pi Foundation owns 63.17 billion tokens with a diluted valuation of over $57.3 billion. In other words, the foundation, which the founders largely control, hold more tokens than the pioneers. This means that they can donate some of those tokens to burn.
Other ways to boost the Pi coin value
There are other ways to boost the Pi coin value. First, the developers can talk with exchanges like Binance, Coinbase, Upbit, and Kraken for a listing. American exchanges like Coinbase would expose it to US to investors who have a large market share in crypto trading.
Similarly, an Upbit and Bithumb listing would move it to the South Korean market, which is one of the most active in the market.
At the same time, the developers should consider a marketing push to popularize and make the case for Pi in the US and Europe, where it is still unknown.
Another way of boosting the Pi Network price is creating a fund to support developers in the network. Finally, a Pi coin ETF approval would provide another catalyst for the network.
Pi Network price technical analysis
PI price chart by TradingView
The two-hour chart shows that the Pi coin price has been in a strong downtrend in the past few weeks. This crash happened after the token formed a head and shoulders chart pattern, a popular reversal sign.
The Pi Network price has dropped below the lower side of the descending channel that connects the lowest swings since March 2. Falling below that level has invalidated the bullish falling wedge pattern that was forming.
Therefore, there is a likelihood that the Pi Network price will continue plunging as many pioneers start selling their coins in panic. If this happens, the token will plunge to the next point at $0.6120, the lowest swing on February 21. This crash will accelerate unless the developers implement the changes mentioned above.
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