PI dropped by 50% in a week - why traders should prepare for further declines?

PI has lost half of its value in the last seven days, indicating a strengthening bearish sentiment among its holders. At the time of writing, the altcoin is trading at $0.72, which marks a sharp drop from last week's price peak of $1.67.

Technical indicators suggest that the downward trend may not be over, as selling pressure remains significant.

PI is facing strong selling pressure

BBTrend PI remains in the red zone on the daily chart, confirming that bearish forces firmly control the situation. On the daily chart, the indicator is currently at -19.36. BBTrend measures the strength and direction of the trend based on the expansion and contraction of the Bollinger Bands. When BBTrend values are positive, it signals a strong upward trend, while negative values indicate a strengthening bearish momentum.

The negative BBTrend PI suggests that its price consistently closes near the lower Bollinger band, reflecting sustained selling pressure and hinting at the potential for further decline.

Moreover, the Elder-Ray index of the token supports this bearish prediction. At the time of printing, the indicator returns a negative value.
The Elder Ray Index measures the strength of buying and selling pressure in the market, using two key components: the strength of bulls and the strength of bears.

When the index is negative, sellers dominate the market. This signals a bearish trend and hints at a continuing downward momentum for PI.

The resistance at the 20-day EMA limits hopes for a recovery.

The PI token is trading below its 20-day exponential moving average (EMA), which forms dynamic resistance above it. The 20-day EMA measures the average price of the asset over the last 20 trading days, giving more weight to recent prices.

When an asset is trading below its 20-day EMA, recent price action is weaker than the short-term trend. This is a bearish signal indicating a lack of buying momentum.

If the trend continues, PI may fall to $0.55. On the other hand, if buying pressure increases sharply, the PI token may recover and rise to $1.01.