Pi Coin (PI) has been a source of frustration for traders over the past several weeks, as it has remained within tight price ranges with minimal directional movement. Over the last seven days, the price of PI has declined by just 0.5%, currently hovering around $0.448. On a monthly timeframe, the price of Pi Coin has fallen by 15%, while its three-month decline has reached 23%. This lack of significant price movement has resulted in a stalemate between bullish and bearish forces in the market.

As the month of July comes to an end, there are indications that a shift might be occurring beneath the surface. The On-Balance Volume (OBV) indicator is showing early signs of potential bullish activity. Between July 13 and 22, the price of Pi Coin experienced a notable upward movement, and the OBV indicator mirrored this trend with a higher high. This synchronization between price and volume suggests that the previous price increase was supported by actual buying pressure rather than being a random fluctuation.

However, this strength still requires validation. For the OBV to confirm a continuation of the bullish trend, it must surpass the previous peak of -1.57 billion. A higher high on the OBV would indicate sustained accumulation, which could reinforce the possibility of a broader bullish reversal. As a cumulative volume-based indicator, the OBV adds volume on days when the price closes higher and subtracts it on days when the price closes lower. When the OBV trends higher alongside the price, it confirms strong bullish sentiment. If the OBV flattens or diverges from the price, it may signal weakening momentum. Currently, the OBV is showing some buildup, but it has not yet broken out of its current range.

The Relative Strength Index (RSI) is also displaying signs of potential recovery. While the price of Pi Coin continues to form lower highs, the RSI has been trending upward. This bullish divergence suggests that bearish pressure is diminishing, as the underlying strength of the asset is increasing despite the price not making new highs. Divergences between the RSI and the price, particularly near key support levels, often precede potential trend reversals.

For this signal to become more concrete, the RSI must cross above the 52 level. A close above 52 would indicate that bullish momentum is not only present but also gaining strength. Until then, the divergence remains a promising signal but not yet confirmed. A move above 52 would suggest the formation of two higher highs, which is a classic sign of a potential bullish reversal. The RSI measures momentum by comparing the magnitude of recent gains to recent losses. When there is a divergence between the RSI and the price, especially near important support zones, it can serve as an early warning of a possible change in trend.

Another potential bullish signal comes from a candlestick pattern observed on July 28. Pi Coin formed a green inverted hammer, a candlestick pattern characterized by a small real body near the low and a long upper wick. This pattern typically appears after a downtrend and may indicate a potential bullish reversal, provided it is confirmed by a strong follow-up candle. Although buyers pushed the price higher during the day, they were unable to maintain the gains. However, the fact that the closing price was higher than the opening price indicates some intraday strength.

What is crucial now is confirmation: a solid green candle that breaks above the high of the wick. Without such a confirmation, the pattern remains a potential reversal rather than a definitive one. This type of behavior is not unique to the current period, as a similar setup on July 18 led to a sharp rally in Pi Coin, with the price rising from $0.439 to $0.521 within four trading sessions.

The combination of a rising OBV, RSI divergence, and the appearance of an inverted hammer forms what could be considered a bullish trifecta. These three indicators together point toward the possibility of a price reversal. However, confirmation is still essential. If the price of Pi Coin breaks above the $0.47 level, which corresponds to the 0.5 Fibonacci retracement, a retest of the $0.52 level becomes more plausible.

On the other hand, if the price closes below $0.44, which is the 0.786 Fibonacci extension level, it would invalidate the current bullish structure. Until there is a clear breakout or confirmation, traders should remain cautious and watch for further signals before taking more aggressive positions in the market.

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