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Centralized tendencies persist, triggering Pi Network coin values to plummet

Pi Network value persisted in a significant slide this week, as worries about its centralization and the associated risks increased.

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Pi Network's price experienced a steep decline this week, fueled by growing concerns over...
Pi Network's price experienced a steep decline this week, fueled by growing concerns over centralization and the potential dangers it entails.

Centralized tendencies persist, triggering Pi Network coin values to plummet

Pi Network's Rollercoaster Journey

The price of Pi Coin plummeted on Saturday, sliding to $0.7040, a whopping 57% drop from its peak this week. This dive in a low volume environment caused a staggering $6 billion evaporation from the market cap, which spiraled down from $11 billion to $5 billion.

Pi Network - Future Uncertain

Pi Network presents a host of risks, with centralization being a significant concern. According to data from CoinMarketCap, Pi has a maximum supply of 100 billion coins, with 7.15 billion in circulation. Unlike Bitcoin or proof-of-stake projects like Cardano and Avalanche, all 100 billion Pi coins have already been pre-mined and stored in wallets controlled by the Pi Foundation.

This setup poses substantial risks to the Pi Network community. For one, the members of the so-called Pi Foundation remain undisclosed, and community input is suspiciously absent. The other risk is that a crafty hacker or an insider could infiltrate the Pi Foundation wallets and offload the tokens, potentially causing a market meltdown. Moreover, the Pi Foundation isn't subject to any audit to verify its holdings, which are estimated to be worth a staggering $70 billion.

Why Pi Network Price Dropped Post Ecosystem Fund Announcement

The lack of transparency and centralization largely explain why major exchanges like Binance and Coinbase have shied away from listing Pi coin, even three months after the mainnet launch.

In addition to centralization issues, Pi Network faces other hurdles that hamper its price performance. For instance, millions of tokens are introduced to the market each month, and 1.48 billion tokens are set to be released over the next 12 months, with billions more in the years to follow.

A Closer Look at Pi Network Price

The eight-hour chart reveals that Pi Coin reached a peak of $1.6673 prior to the highly anticipated ecosystem news event. Subsequently, it plunged to $0.6980, its lowest point in over a week. The coin fell below the key support at $0.7760, which was the highest swing on April 12. This shift invalidated the bullish break-and-retest pattern. Furthermore, Pi has slipped below the 25-period moving average, and the Relative Strength Index (RSI) has pointed southward, moving below 50.

As a result, the Pi Network price is likely to tumble and retest support at $0.6. A fall below that level could indicate further downturn, potentially landing the coin at $0.40.

Pi Network Plunges Over 25%, Snapping Week-Long Rally

While Pi Network has made headway in various aspects, concerns about centralization, token unlocks, transparency, and price volatility continue to linger. To build trust and achieve widespread adoption, Pi Network needs to focus on ecosystem development, transparency in governance, increased community engagement, and securing listings on prominent exchanges like Binance.

  1. Despite the Pi Foundation's undisclosed members and minimal community input, some investors continue to invest in Pi Network, acknowledging the potential of cryptocurrency technology in finance and seeking returns on their investments.
  2. The Pi Foundation, with an estimated $70 billion worth of pre-mined coins, could potentially attract crypto mining interests, given the high supply of Pi Coins and the technology behind it.
  3. Binance and Coinbase avoid listing Pi Coin due to concerns about the centralization of the Pi Network, which sets it apart from other crypto projects like Bitcoin, Cardano, and Avalanche that have decentralized networks.
  4. As a proof-of-stake project, Cardano offers a more transparent and community-driven approach to crypto investing, which helps minimize the risks of infiltration and manipulation of the network's ecosystem.
  5. Investors considering investing in Pi Network might also consider other established crypto projects like Bitcoin and Cardano, given their demonstrated track record, solid governance, and strong community support.
  6. Despite the recent drop in Pi Coin's price, believers in the project's potential may view this as an opportunity to buy them at a lower price and hold them for potential future gains, taking advantage of the volatile nature of the crypto market.

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