Pi Network: Analyzing Recent Price Movements and Potential Cup-and-Handle Formation

The Pi Coin price has shown relative stability in early September, with minor fluctuations observed across different timeframes. Month-on-month, the price has decreased by 2%, while showing a slight increase of 0.6% over the past week and approximately 1% in the last 24 hours. These muted movements are particularly noteworthy for a token that remains 60% below its value from a year ago.

This period of restraint has drawn attention to the current price structure, as it potentially indicates the formation of a bullish cup-and-handle pattern. Beyond this technical pattern, other underlying factors are also at play within the Pi Network ecosystem.

Technical Indicators Suggest Building Buying Pressure

The Money Flow Index (MFI), a volume-weighted momentum indicator, has rebounded to 66 on the 4-hour chart. This increase in the MFI, even as the Pi Coin price experienced slight fluctuations, suggests that buyers are quietly absorbing price dips. The MFI is calculated using both price and volume data, providing insight into the strength of money flowing in or out of an asset.

MFI Interpretation:

• MFI > 80: Overbought condition
• MFI < 20: Oversold condition
• MFI trend: Rising MFI indicates increasing buying pressure

If the MFI pushes through the 75-76 level, it would mark a higher high in money flow against the current fragile trend. This could be interpreted as a classic sign of buyers taking control rather than merely defending support levels.

Complementing the MFI analysis, the Bull-Bear Power (BBP) histogram has also shown positive signs. The BBP compares price extremes to a moving average, helping to reveal which market force (bulls or bears) is currently dominant. Recent data shows a return of green clustering in the BBP, similar to patterns observed in late August when bulls regained momentum, preceding Pi Coin’s month-end price surge.

Cup-and-Handle Formation: Key Levels to Watch

A potential cup-and-handle pattern may be forming, reminiscent of the price action observed between August 22-29. During that period, a clear cup-and-handle breakout propelled the Pi Coin price from approximately $0.35 to $0.39, representing an 11-12% move that followed the textbook cup-and-handle pattern progression.

Key Levels for the Current Formation:

• Neckline zone: $0.39
• Precise pivots (4-hour chart): $0.3950 and $0.3983

For this pattern to be activated, a decisive 4-hour close above $0.39 is crucial. Such a breakout could potentially unlock a measured move of nearly 19%. However, it’s important to note that this projection is contingent on bulls maintaining control and the MFI continuing its upward trend or at least remaining stable.

Pattern Confirmation Process:

1. Pi Coin price reaches $0.39
2. Quick consolidation forms the handle
3. Price breaks past the handle
4. 19% projection measured from the breakout point

It’s crucial to emphasize that until the breakout occurs, this remains a potential formation. Failure to clear the neckline at $0.39 would likely result in the Pi Coin price remaining range-bound. Moreover, if the price loses the $0.33 level on a 4-hour closing basis, it would invalidate the short-term bullish hypothesis and potentially prime the Pi Coin price to test its all-time low of $0.32.

As with all technical analysis, past performance does not guarantee future results, and traders should conduct thorough research and risk assessment before making investment decisions.