The Pi Network price continued to decline on Saturday, reflecting growing concerns over its centralization and the ongoing release of unlocked tokens. The value of Pi Coin dropped to $0.7040, marking a steep decline of over 57% from its peak earlier in the week. This sharp downturn wiped out approximately $6 billion from its market capitalization, which fell from $11 billion to $5 billion.

Centralization Concerns Surrounding Pi Network

One of the most pressing risks facing the Pi Network is its centralized structure. According to recent data, Pi Coin boasts a maximum supply of 100 billion tokens, with 7.15 billion currently in circulation. Unlike Bitcoin, where new coins are generated through mining, or proof-of-stake projects like Cardano and Avalanche that rely on validators to secure their networks, all Pi tokens have already been pre-mined.

The Pi Foundation controls the remaining 92 billion unlocked tokens, which raises significant red flags. The lack of transparency about the foundation’s membership and governance structure is a major issue for the Pi Network community. Members have little to no input in decision-making processes, further amplifying concerns about centralization.

Security and Audit Risks

Another critical risk arises from the potential for a security breach. If a hacker or insider gains access to the Pi Foundation’s wallets, they could release a large number of tokens into the market, causing a severe price drop. Moreover, the Pi Foundation is not subject to external audits, leaving its estimated $70 billion in holdings unverified.

Why Major Exchanges Are Hesitant

The centralized nature of the Pi Network and its lack of transparency are likely reasons why major cryptocurrency exchanges, such as Binance and Coinbase, have refrained from listing Pi Coin. Despite the mainnet launch occurring three months ago, these platforms have shown little interest in adding the token to their offerings.

Unlocking Tokens and Market Impact

Another factor putting downward pressure on Pi Coin’s price is the scheduled release of millions of tokens into the market each month. Over the next 12 months, 1.48 billion tokens will be unlocked, with billions more set to flood the market in subsequent years. This influx of tokens significantly increases the risk of oversupply, which could further depress prices.

Technical Analysis: Pi Network Price Trends

From a technical perspective, the eight-hour price chart highlights a sharp decline in Pi Coin’s value. The token reached a high of $1.6673 earlier in the week, driven by anticipation surrounding ecosystem-related announcements. However, it has since plummeted to $0.6980, marking its lowest point in over a week.

The price has also fallen below a critical support level of $0.7760, which was the highest swing on April 12. This breach invalidated the bullish break-and-retest pattern that many traders were monitoring. Additionally, the coin is now trading below its 25-period moving average, and the Relative Strength Index (RSI) has dipped below the 50 mark, signaling increased bearish momentum.

Key Levels to Watch

  • If the current downward trend continues, Pi Coin is likely to test support at $0.60, aligning with an ascending trendline that connects the lowest swings since April 7.
  • A breakdown below $0.60 could open the door for further declines, potentially pushing the price toward $0.40.

Investors should closely monitor these key levels and market dynamics as uncertainty surrounding the Pi Network persists. The centralization risks, combined with the ongoing release of tokens, are likely to influence the future price trajectory of Pi Coin.

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