- PI token’s price faced rejection at the $0.64 resistance recently
- Lack of buying volume meant a recovery might be difficult, but traders can still anticipate some gains in the coming days
Pi Network’s [PI] bulls were unable to climb past the $0.64 resistance. As AMBCrypto reported last week, Pi Network’s bulls lacked the strength to push the price higher. This was evident in the lack of buying volume last week – A factor that has not yet changed.
Source: PI/USDT on TradingView
On the 1-day chart, PI appeared to be bearish. It closed a daily session at $0.479 on Tuesday, 01 July. This daily close was lower than the one it made at $0.5 on 22 June. Meanwhile, the MFI made higher lows. While the MFI’s ascent reflected the weakening of bearish pressure, it also underlined a bullish divergence.
PI’s price was at local lows, and a momentum divergence was spotted – An early sign that a bullish reversal from $0.48 could occur. However, the bias on the 1-day timeframe remained bearish. The price would need to climb past the $0.64 resistance to flip the structure bullishly.
The token might not be strong enough to forge a path higher. The moving averages flashed bearish momentum and were likely to act as dynamic resistance levels should PI attempt to recover. This recovery attempt was not underway at press time. Despite the bullish divergence, the volume remained favorable to the sellers.
The OBV has been trending lower over the past month. This trend has not shifted. It implied that the selling volume behind the Pi token has been relentless, and buyers have not been able to overcome this pressure. Hence, traders should be wary of going long, despite the momentum divergence.
Here’s why it could be worth going long on PI
Source: PI/USDT on TradingView
Having discussed why it might be risky to go long, it would only be fair to assess whether the risk could be worth the reward. AMBCrypto zoomed in on PI’s price chart. The 4-hour timeframe highlighted a potential range formation from $0.48 to $0.63. The MFI was at 47, suggesting that the market was in a neutral state.
Since the range low at $0.48 has been tested in recent hours, it made sense to go long. The stop-loss has to be tight, just below the low from a week ago at $0.47. With a conservative take-profit target of the mid-range resistance at $0.558, traders could capture a 2.4 risk-to-reward move.
This long setup might be affected if Bitcoin [BTC] endures losses in the coming days. This could change the market-wide sentiment and send PI sliding lower again.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
