PI's Price Collapse: A Flow Analysis of Supply, Sentiment, and Structural Breakdown

The price action for PI has been catastrophic. The token hit a new all-time low near $0.13 last Friday, marking a 28% drop from the previous day. This plunge is part of a relentless decline from its all-time high of $2.99 in late February 2025, representing a collapse of over 94% in value. The drop occurred against a backdrop of severe market stress, with the Crypto Fear and Greed Index falling to 9, signaling "extreme fear" as Bitcoin itself fell below $60,000.

The selling pressure was aggressive, not passive. Trading volume spiked dramatically on the decline, with over 27 million tokens traded on February 6, a significant jump from the typical few million dollars in daily volume. This surge indicates active, forceful selling rather than a slow bleed, highlighting the lack of liquidity to absorb the sell-off. The pattern of consecutive all-time lows suggests persistent selling pressure and weak speculative demand.

Viewed another way, the setup is one of structural breakdown. The token's circulating supply has now reached 8.82 billion tokens, up sharply from last month, adding to the downward pressure. With minimal external capital flowing in and a high concentration of tokens controlled by the foundation, the market structure appears fragile. The recent crash demonstrates how thin liquidity can accelerate price discovery to the downside when selling accelerates.

The Flow Drivers: Unlocks and Supply Pressure

The primary driver of PI's collapse is a surge in circulating supply. The token's circulating supply has now reached 8.82 billion tokens, up sharply from just over 8.3 billion last month. This increase is directly tied to large unlocks, with more than 193 million PI set to unlock in February, worth over $31 million. This influx of new tokens into the market has created overwhelming sell pressure, a key factor cited by analysts for the recent price decline.

A concerning on-chain move by the Pi Core Team has amplified these fears. In early February, a wallet labeled as the PI Foundation 1 moved over 500 million PI internally. While not a direct sell-off, this transfer of more than $80 million worth of tokens raises immediate concerns about future supply hitting the market. It signals that a massive, concentrated reserve is being prepared, which could be deployed at any time to meet demand or, more likely, to exit.

The structural imbalance is stark. With a current market cap of $1.41 billion, PI trades at just 8.76% of its fully diluted valuation. This means over 91% of its potential supply is still unrealized and not priced into the market. The combination of a rapidly expanding circulating supply, large upcoming unlocks, and a foundation holding a vast, potentially sellable reserve creates a severe overhang. This setup makes the token exceptionally vulnerable to any further negative sentiment or liquidity drain.

Structural Breakdown: Technicals and Key Levels

The technical structure has decisively broken down. PI has cleared its key resistance at $0.190, a level that now acts as dynamic resistance. More critically, the price has fallen below the 20-EMA, which has flipped from a support to a ceiling. This confirms a bearish trend where every bounce is being sold into, with stacked exponential moving averages overhead.

The immediate focus is on the $0.130 liquidity floor. The price is now testing this critical zone, where concentrated bids could slow a further decline. A break below it, however, would expose significant downside, with the next targets in the $0.115 to $0.100 range. The recent surge in trading volume validates aggressive distribution, increasing the risk of a swift sweep through this low-liquidity pocket.

Weekly chart confirmation solidifies the bearish shift. PI has closed below its Gaussian channel, a sign of confirmed momentum weakness. This breakdown, occurring once price dropped below $0.16, signals a shift in trend. With the price now near its all-time low and pressing against the monthly Gaussian channel, the risk of a deeper decline is elevated, especially if broader market conditions remain weak.

Catalysts and Risks: What to Watch

The immediate catalyst is the $0.130 liquidity floor. This zone is the critical level to monitor for signs of absorption or a breakdown. A decisive close above it could signal a temporary halt to the selling, while a break below would likely accelerate the slide toward the next support at $0.115. The recent surge in trading volume validates aggressive distribution, making this low-liquidity pocket particularly vulnerable to a swift sweep.

On-chain activity from the Pi Core Team is another key watchpoint. The internal transfer of over 500 million PI in early February is a red flag for future supply. While not a direct sell, it signals that a massive, concentrated reserve is being prepared. Any subsequent movement of these tokens to exchanges or a public announcement of new utility could act as a major catalyst, either positive or negative, for sentiment and price.

Finally, the broader crypto market's recovery from extreme fear is a crucial external catalyst. The market's recent plunge to a Crypto Fear and Greed Index of 9 created a tailwind for risk-off selling, including for PI. A sustained rebound in Bitcoin and the overall market cap would be necessary to lift sentiment and provide a tailwind for risk assets like PI, potentially offering a path to stabilize the token's price.