Pi Network symmetric triangle convergence! PI token unlock slows down, breakout imminent?

The price of Pi Network has formed a symmetrical triangle pattern on the daily chart. As the pattern approaches its convergence point and key fundamentals align, the price could experience significant volatility in December. On December 3, Pi Network was priced at $0.23, about 51% higher than this year’s lowest level. Fundamental catalysts include the upcoming launch of decentralized exchange (DEX) features and a significant slowdown in the token unlock pace.

Significant Slowdown in Token Unlock Releases Supply Pressure

Several important fundamental factors may help Pi Network’s price rise in the short term. One of these is that the token unlock progress will slow significantly over the next seven months. PiScan data shows that 190 million tokens will be unlocked on the network this month. After that, the number of tokens unlocked will gradually decrease until June next year, when 76 million tokens will be released. The decline in token unlocks is a bullish factor for cryptocurrencies as it indicates lower inflation.

This slower unlock pace is significant. From 190 million in December to 76 million in June, the decrease reaches 60%. This means the new supply the market needs to absorb drops sharply, shifting the supply-demand balance in favor of price increases. In the past few months, large-scale token unlocks have been one of the main reasons for Pi Network’s price pressure. Many early miners have chosen to sell after their tokens unlock, creating ongoing sell pressure.

From the start of 2024 to now, Pi Network has unlocked more than 1.5 billion tokens cumulatively. This rapid unlocking pace has made it difficult for the price to form a sustained upward trend, as every rebound faces a new wave of unlocked token selling. However, as the unlock speed enters a downtrend, this structural sell pressure will gradually ease. If demand stays stable or grows, the decrease in supply will naturally push the price upward.

Token Unlock Schedule and Reduction

December: 190 million (benchmark month)

January to May: gradual decrease (specific data not disclosed)

June: 76 million (60% reduction from December)

Impact: Significant relief of supply pressure, supporting price bottoming and rebound

This unlock rhythm reflects the Pi Network team’s consideration of market supply and demand balance. Unlocking too fast destroys the price, while unlocking too slow harms the interests of early miners. The current gradual deceleration model seeks to find a balance between the two. For investors, slower unlocks mean that in the coming months, price volatility may be driven more by demand than by supply pressure.

DEX and AMM Function Testnet Launched

Pi Network will also launch a decentralized exchange, automated market maker, and token generation features, which are already live on the testnet. Once officially launched, users will be able to generate tokens on the network, create liquidity, and exchange tokens, greatly enhancing the utility of Pi tokens. This is a key milestone in the development of the Pi Network ecosystem, marking its transformation from a simple payment token to a full DeFi platform.

The launch of a DEX (decentralized exchange) will bring multiple benefits to Pi Network. First, users can trade tokens directly within the Pi ecosystem without relying on external centralized exchanges, enhancing the system’s autonomy and integrity. Second, the AMM (automated market maker) mechanism allows users to provide liquidity to trading pairs and earn fee income, creating new revenue sources for Pi holders. Third, the token generation function enables developers to launch new token projects on the Pi chain, enriching ecosystem diversity.

From a technical perspective, implementing DEX and AMM functionality involves overcoming several challenges. Smart contract security is the top concern, as any vulnerability could lead to fund loss and a crisis of trust. Liquidity depth is also crucial; if initial liquidity is insufficient, large trades will face serious slippage, impacting user experience. In addition, transaction speed and fees need optimization to compete with mature DeFi platforms.

Launching on the testnet is an important step before the official rollout. During the testnet phase, developers can identify and fix potential security issues, optimize user interfaces and trading processes, and gather feedback from the community. Pi Network has tens of millions of users, whose participation will provide valuable real-world data to the testnet. If the testnet runs smoothly, the official launch will greatly enhance Pi Network’s price appeal.

MiCA Application and EU Market Entry

At the same time, the price of Pi Network will also benefit from the potential outcome of its MiCA application, which would enable EU cryptocurrency exchanges to list the token. MiCA (Markets in Crypto-Assets) is the EU’s crypto asset regulatory framework, passed in 2023 and being implemented in phases starting in 2024. Tokens that meet MiCA standards can be legally traded throughout the EU, a necessary condition for entering the European market.

Pi Network’s MiCA compliance application shows its emphasis on the European market. The EU has about 450 million people and is one of the world’s most important economies. If Pi Network obtains MiCA approval, it will be able to list on mainstream European exchanges, greatly increasing liquidity and accessibility. Currently, Pi Network’s presence on major centralized exchanges is limited, which restricts its price discovery and market depth.

MiCA’s compliance requirements are strict, including issuer transparency, disclosure of reserve assets (for stablecoins), anti-money laundering measures, and consumer protection mechanisms. Pi Network will need to prove that its technical architecture, governance model, and economic framework meet these standards. This process may take months or longer, but once successful, it will bring regulatory clarity and institutional recognition to Pi Network.

For investors, the progress of the MiCA application is an important indicator to watch. If Pi Network announces phased progress or approval, it could trigger a positive price reaction. Conversely, if the application encounters obstacles or is rejected, market confidence will be hit. Therefore, closely monitoring official announcements related to MiCA is crucial.

Strategic Investments Building Ecosystem Use Cases

Other potential catalysts are the continually developing ecosystem, especially after recent investments. The company recently invested in OpenMind and CiDi Games, both rising stars in AI and gaming. Pi aims to leverage these investments to create more use cases for the Pi token. For example, CiDi Games will adopt Pi as a payment option in its games. Additionally, Pi Network’s node operators will be able to provide services to companies in the AI industry, with OpenMind as the first client.

These strategic investments reveal Pi Network’s plan for ecosystem expansion. In the past, Pi was mainly positioned as a mobile mining and P2P payment tool, lacking concrete use cases. By investing in gaming and AI companies, Pi Network is creating real demand for its token. When users can buy in-game items or pay for AI services with Pi, the token’s intrinsic value will be enhanced.

Integrating Pi payments into CiDi Games is a typical use case. The gaming industry is one of the ideal scenarios for cryptocurrency adoption, as players are used to trading virtual items and are receptive to digital payments. If CiDi Games’ titles succeed and attract a large player base, they will create sustained purchasing demand for Pi. This demand is not speculative, but based on real usage, making it more sustainable.

The integration of OpenMind’s AI services is even more innovative. Pi Network’s node operators can provide computing resources to AI companies, similar to decentralized cloud computing. This model connects the Pi ecosystem with the AI industry, creating revenue opportunities for node operators while offering cost-effective computing solutions for AI companies. If this model proves viable, it could attract more AI firms to join the Pi ecosystem.

Technical Analysis: Symmetrical Triangle Convergence Point Breakout Imminent

(Source: Trading View)

The daily chart shows that Pi Network’s price has pulled back over the past few days, dropping from last week’s high of $0.2800 to the current $0.2300. The price of Pi Coin is nearing the apex of the symmetrical triangle pattern, signaling an imminent breakout. On the positive side, the token price has slightly broken above the 25-day exponential moving average. It has also broken above the supertrend indicator, which is a bullish signal.

A symmetrical triangle is a classic consolidation pattern in technical analysis, usually occurring in the middle of a trend. This pattern is formed by a descending resistance line and an ascending support line that gradually converge into a triangle. As the price nears the convergence point, volatility decreases, then suddenly breaks out upward or downward. Historical statistics show that symmetrical triangle breakouts are more likely to follow the direction of the preceding trend.

Pi Network’s current symmetrical triangle has formed as a consolidation after an upward surge, meaning an upward breakout is more likely. The convergence point is expected to arrive in mid-December, coinciding with the time window for several fundamental catalysts mentioned above. If the DEX testnet runs smoothly, the MiCA application progresses, or token unlock data shows a faster-than-expected slowdown, any of these could trigger a breakout.

The bullish signal from the supertrend indicator further reinforces this outlook. The supertrend is a trend-following indicator that combines average true range (ATR) and price position. When the price is above the supertrend line, it’s considered bullish; below, bearish. Pi Network is currently above this indicator, showing a medium-term bullish trend. The breakout above the 25-day EMA is also a positive sign, indicating short-term momentum is improving.

Therefore, the token is likely to see a bullish breakout, possibly surpassing the key resistance level of $0.2800, which was the highest point reached on November 28. Breaking through this level would imply greater upside. According to the measurement rule for symmetrical triangles, the target price after the breakout is typically the pattern’s height added to the breakout point. If the price breaks out from the current level, the theoretical target could be in the $0.35 to $0.40 range.