Pi Network (PI) Price Prediction: Short positions are about to squeeze, and low trading volume may fall below $0.40

Today (10th) in the Asian early session, Pi Network (PI) has slightly risen, currently reported at 0.4693 USD, but the Trading Volume remains sluggish. The actual Volatility of Pi coin has been steadily declining since it peaked in February, consistent with the consolidation phase. Coinglass data shows that the funding Interest Rate of Pi coin has turned negative, increasing the risk of short positions.

At first glance, the price trend of Pi coin appears unusually calm. However, for bears who are pessimistic about the recovery of Pi coin prices, trouble may be imminent as the actual volatility decreases.

The actual volatility of Pi coin for the week has surged significantly after reaching a historical high in February. However, the latest data from Glassnode shows that volatility has steadily decreased over the past two months.

This sustained decline is consistent with the long-term price consolidation of the Pi coin — a period characterized by indecision, with directional momentum weakening, testing the patience of both bulls and short positions.

However, the decrease in volatility may be beneficial for long positions. Historically, prolonged consolidation lays the foundation for significant breakthroughs, as price compression can accumulate potential energy for a strong directional trend.

Under this low volatility, Pi coin may slowly move towards a potential rebound.

(Source: Glassnode)

Traders may be caught off guard

Despite the actual Volatility decreasing, Coinglass's derivatives data shows a shift in market sentiment.

The financing interest rate has dropped into negative territory, indicating that short positions (sellers) are now paying costs to long positions (buyers) to maintain their positions.

Negative interest rates usually indicate that bearish sentiment is dominant, with traders heavily betting that the Pi coin will decline further.

But this radical short positions may backfire. Given that the actual volatility is close to a multi-month low, a sudden fluctuation in price has become a foregone conclusion.

If the Pi coin breaks through, it may trigger short positions squeeze, forcing short positions to close and causing a significant price pump.

(Source: Coinglass)

Pi Coin Price Prediction: Short Positions Squeeze is Coming

From a technical perspective, the 4-hour chart shows that the price of Pi coin has formed a descending wedge. However, as of the writing of this article, the cryptocurrency is attempting to break through the upper trend line of the wedge.

In order to successfully achieve this goal, the trading volume of Pi must increase. However, in the past 24 hours, its trading volume has been hovering at the same level, below 100 million USD.

If this continues, the price of Pi coin may continue to fluctuate in the same range. However, if buying pressure increases, the trading volume of this cryptocurrency may soar and could lead to a full breakout.

Once verified, the market value of Pi coin could rise to $0.58. If this occurs, potential short positions squeeze may push its price up, and the final price could reach $0.69.

Alternatively, if the Trading Volume remains sluggish or bearish pressure increases, the trend may change. In this case, the PI coin may drop to $0.40.

(Source: Trading View)