PI Trapped in Supply-Driven Downtrend as Token Unlocks and Weak Utility Weigh on Price

Pi Network (PI) is encountering liquidity challenges due to a 437 million token supply already on exchanges, and an additional 1.21 billion tokens set to unlock in 2026.

On-chain and technical data indicate bearish momentum, including a declining RSI and potential breakdown below $0.20, exposing key support levels at $0.18 and $0.15.

Whale activity and rising supply pressure further amplify risks, with token unlocks and low volume signaling continued bearish bias. According to analysis, these dynamics suggest the project is facing significant structural challenges.

Pi Network is trapped in a long-term bearish trend due to structural challenges, primarily a massive supply overhang. As of late 2025, 437 million PI tokens—approximately 25% of the total supply—were already deposited on centralized exchanges, contributing to high liquidity risk. These tokens represent immediate selling pressure, and the project anticipates 95 million tokens unlocking in January 2026 alone, valued at about $20 million at a $0.20 floor. This creates a liquidity overhang exceeding $200 million over the next 12 months.

The technical outlook for PI is equally bearish. The token remains below key moving averages, with the 20-day EMA at $0.2089 acting as resistance. A breakdown below $0.20 would expose critical support levels at $0.18 and $0.15. On-chain activity, including large deposits to exchanges like OKX, further indicates rising sell pressure.

Despite ecosystem efforts, PI's utility remains underdeveloped. While the Pi Network has released a new developer library to simplify Pi Pay integration, the token's broader adoption remains limited. Ecosystem upgrades like the Stellar protocol V23 and partnerships with gaming platforms are promising but have not yet translated into robust demand for the token.

What Drives the Bearish Momentum?

Bearish momentum in PI is supported by multiple on-chain and technical factors. The Chaikin Money Flow is declining, and the RSI shows diminishing bullish momentum. Large deposit inflows to centralized exchanges have increased by 61,217 tokens in the past 24 hours. Additionally, the MACD is contracting toward the signal line, signaling a potential bearish crossover.

These dynamics suggest that even minor selling pressure could trigger sharp declines. The token's low social dominance (0.004%) and subdued retail interest further reduce the likelihood of a significant bullish reversal.

What Could Help PI Break the Downtrend?

Breaking the PI downtrend would require structural changes to address both supply overhang and utility gaps. Structured token unlocks, such as time-locked vesting mechanisms for early adopters, could mitigate liquidity shocks. Implementing a staking and burn model could also reduce circulating supply and create deflationary incentives.

Expanding partnerships with DeFi platforms and remittance services could anchor PI's value proposition. For example, integrating the token into cross-border payment systems or decentralized marketplaces could create new demand-side catalysts. However, these strategies remain in early stages and will need strong execution to drive meaningful adoption.

How Does the Ecosystem Address Risks?

The Pi Network has released a new developer library to simplify Pi Pay integration, supporting JavaScript, React, and backend frameworks like Next.js and Ruby on Rails. This effort aims to lower the barrier for developers, enabling faster integration of payment features into applications. While this move is promising for ecosystem growth, it alone may not offset the risks posed by token unlocks and weak demand.

Security is another critical concern for Pi users, with phishing attacks and compromised wallets becoming more common. The Pi Network has issued warnings advising users to avoid suspicious links and to access the Pi Browser only through the official PiNet.com domain. These efforts highlight the growing focus on wallet security in the crypto industry, particularly during transitional phases like Pi's open mainnet rollout.