Over the past 24 hours, the PI token experienced a significant price drop of 25%, occurring shortly after the announcement of Pi Network Ventures’ $100 million startup fund. This development has raised questions regarding the immediate future of the PI token's market performance, despite the ambitious initiative aimed at fostering innovation within the network.

Technical analysis of the PI\/USD one-day chart reveals that the current downturn might not have concluded yet. At the time of writing, the PI token's price is nearing a critical threshold, poised to breach its 20-day Exponential Moving Average (EMA). Historically, a break below this moving average has often signaled prolonged bearish tendencies.

The 20-day EMA calculates the average trading price of an asset over the last 20 trading days, with greater emphasis placed on recent data points. When the asset's price approaches this level from above, it typically indicates diminishing short-term upward momentum and could foreshadow a transition to a bearish phase. For PI, breaching this level might reverse its recent uptrend observed between May 8 and May 13, potentially paving the way for further downward adjustments.

Additionally, the Balance of Power (BoP) indicator for PI is presently in negative territory at -0.14, reflecting the prevailing selling pressure in the market. The BoP measures the relative strength of buyers versus sellers based on the relationship between closing prices and daily trading ranges. A negative value suggests that sellers are exerting more influence, leading to downward price movements.

A decisive fall of PI below its 20-day EMA, which currently serves as dynamic support at $0.80, would validate the shift in investor sentiment towards a bearish outlook. This moving average has historically acted as a buffer against price declines, attracting buying activity whenever the price approached it. Consequently, a closure below this support level would eliminate this protective barrier and solidify the ongoing bearish perspective, indicating heightened selling pressures among PI token holders and suggesting the possibility of a more extensive correction ahead.

Under such circumstances, the PI token might retrace back to its historical low of $0.40. Conversely, should the bullish forces reclaim control, they could propel the PI token's price towards the $1.01 mark.

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