Pi Network fell 4% on Friday, having previously surged for three consecutive days due to positive news from the CiDi Games partnership. As CEX sees a large amount of deposit ahead of the December PI Token unlock, intraday corrections may erase this week's gains. Pi Network will unlock 186 million PI coins in December, which is equivalent to 43% of the total supply of 431.48 million PI Tokens available for trading on CEX.
CiDi Games cooperation loses appeal under the shadow of Token unlocking
The collaboration between Pi Network and CiDi Games should be significant good news. The PI Token, based on mobile mining cryptocurrency, will now become the primary payment, transaction, and reward currency for all games under CiDi Games. This integration creates practical application scenarios for the PI Token, allowing it to transcend pure speculative assets and transform into a functional in-game currency.
In addition, CiDi Games is developing an open framework to expand the Pi Network, with preliminary testing planned for early 2026. This long-term technological collaboration demonstrates both parties' commitment to building a sustainable ecosystem, which should theoretically provide long-term value support for the PI Token.
However, the market's reaction to this positive news was extremely short-lived. After three consecutive days of gains, PI immediately retraced 4% of its increase on Friday, indicating that investors' focus has shifted from the potential of gaming applications to more pressing supply shock risks. This rapid shift in market sentiment reflects that in the cryptocurrency market, short-term supply and demand imbalances often have a greater influence on price trends than long-term fundamentals.
The announcement from CiDi Games lost its appeal on the eve of the token unlock in December, not because the collaboration itself lacks value, but because the market is concerned about the impending large-scale selling pressure. When such a significant increase occurs on the supply side, the growth on the demand side must keep pace to maintain price stability, while the adoption of gaming applications is usually gradual and cannot immediately offset the supply shock.
Unlocking 186 million Tokens in December: 43% Supply Shock
Pi Network 1.86 million PI Tokens will be unlocked in December, accounting for 43% of the total supply of 431.48 million PI Tokens that can be traded on centralized exchanges. This ratio is extremely rare and dangerous in token unlocking events. Generally, token unlocks exacerbate selling pressure during times of low investor confidence, and a 43% supply increase is sufficient to trigger market panic.
From a market mechanism perspective, when the circulating supply suddenly increases by 43%, if demand remains unchanged, the price should theoretically fall by about 30%. However, the actual situation is often worse, as the increase in supply itself can trigger panic selling, leading to further contraction in demand. This vicious cycle is often seen in Token unlocking events.
The Triple Impact of December Unlock on Pi Network
Supply Side Surge: 186 million Tokens entered the market, accounting for 43% of the current circulation.
Sell pressure expectation: Early investors and project parties may cash out immediately after unlocking.
Collapse of Confidence: Market expectations of falling prices lead to panic selling.
The intraday pullback of PI aligns with the surge in CEX wallet balances, reaching 1.71 million tokens in the past 24 hours, indicating a loss of confidence among traders and a significant amount of funds being deposited. This surge in CEX deposit volume is a typical precursor to a sell-off, as investors need to transfer tokens from private wallets to exchanges before they can sell. The single-day deposit volume of 1.71 million tokens is several times the average daily trading volume, showing that a large number of token holders are preparing to exit.
Historical data shows that large-scale Token unlocks typically lead to prices starting to fall 1-2 weeks before the unlock, as the market reflects expectations in advance. The day of the unlock is often not the lowest point, with the true bottom usually occurring 1-2 weeks after the unlock, when panic selling has ended and a new supply-demand balance is established.
Technical Analysis: 100-day line lost, urgent at 0.20 USD
As of Friday's press release, the price of Pi Network has fallen by 4%, currently trading close to $0.2600, almost erasing Thursday's 6.88% pump. If it closes lower that day, the short-term rebound will come to an end and may threaten the previously recovered 50-day Exponential Moving Average (EMA) at $0.2446. If PI falls below $0.2446, it may further retrace to the psychological barrier of $0.2000.
From a technical structure perspective, PI is currently testing the support at the 100-day moving average of 0.2921 USD. This moving average has acted as a support level multiple times over the past few months, and if it is effectively broken, it will open up a larger space for a fall. The area between 0.2921 USD and 0.2600 USD is a key battleground for bulls and bears. If the bulls cannot hold this level, the bears will dominate the upcoming trend.
The technical indicators on the daily chart show that buying pressure has eased. The Relative Strength Index (RSI) has fallen to 61, indicating that the price has retreated from the overbought zone. A retreat of the RSI from the overbought zone usually signals a weakening of upward momentum, and if it continues to drop below 50, it will confirm a trend reversal from bullish to bearish. The Moving Average Convergence Divergence (MACD) and the signal line are currently stable above the zero line. If the pullback widens, the red line may fall below the blue line, triggering a sell signal.
Key Technical Levels and Target Price
Current Price: 0.2600 USD
First Support: 50-day EMA 0.2446 USD
Second Support: Psychological Barrier 0.2000 USD
First Resistance: 100-day moving average 0.2921 USD
Second Resistance: August 1 low point 0.3220 USD
Looking up, the potential rebound of PI may test the 100-day moving average at $0.2921, followed by the low of $0.3220 on August 1. However, before the token unlock is completed in December and the market digests the new supply, any rebound may be a brief technical correction rather than a trend reversal.
Investor Strategy: Wait for the dust to settle after unlocking
For existing holders and potential investors of Pi Network, the current environment requires extreme caution. The supply shock brought about by the token unlock in December is a certain event, while the demand growth from the CiDi Games partnership is gradual. This supply-demand imbalance is difficult to reverse in the short term.
Current holders should evaluate their holding costs and risk tolerance. If the holding cost is below $0.20 and one can withstand volatility, they may choose to hold the coin and wait for market stability after the unlock. If the holding cost is higher or one cannot withstand further falls, reducing positions near the current price may be a more prudent choice.
Potential investors should wait until the unlock in December is completed and the market has fully absorbed the selling pressure before considering entry. Historical experience shows that 1-2 weeks after the token unlock often provides better buying points, as the uncertainty on the supply side has been eliminated and panic selling has also ended.
