Pi Network Drops 3% Amid KYC Controversy, Industry Gains

Pi Network, the native asset of the Pi Network, has experienced a significant decline, dropping by 3% in the past 24 hours. This downturn contrasts with the gains seen by other major cryptocurrencies such as Ethereum (ETH) and Solana (SOL), which have increased by 3.5% and 0.5% respectively. The recent decline in Pi Network's value can be attributed to several factors, including heightened Know Your Customer (KYC) demands and sliding momentum indicators.

The Pi Network recently implemented a controversial move to strengthen its KYC protocols by requiring an email address to activate the two-factor authentication (2FA) feature of its mobile application. This change was made to address challenges with current SMS (text message) account verification, which the developer claims is no longer suitable due to the global spread of Pi users and the limitations of telecommunications in certain regions. However, the crypto community has criticized this move, viewing it as an unnecessary breach of users’ privacy in an industry where anonymity is highly valued.

Pi Network has faced scrutiny for its unilateral decision to demand that Pi holders go through a strict KYC process to migrate their PI tokens to the public mainnet. This, combined with allegations from prominent figures within the crypto industry claiming that Pi is a scam, has contributed to depressing its price. Currently, Pi is trading 77% below its all-time high, indicating a significant loss in value.

According to the hourly chart from OKX, Pi has been in a steady decline, currently just 14.9% away from its all-time low of $0.6152 from February 20. The token found temporary support at $0.6800, but momentum indicators suggest that this was only a short-lived bounce. The market's overall positive mood may have caused Pi’s sellers to take a brief pause, but the token needs to climb by 6.3% to have another chance to reverse its downtrend.

A Fibonacci retracement study shows that bears were targeted by a liquidity trap as the token surged above the 61.8% level but collapsed right after, indicating that the downtrend is still active. When a retracement like this occurs, the odds that the asset will make a lower low increase dramatically. In the case of Pi, the next stop would be the $0.6800 level, which is the nearest area of support. If that line fails to hold, nothing would prevent Pi from collapsing to all-time lows.