Key Takeaways
An analysis of PI’s charts highlighted the crypto trading within a cup-and-handle formation. Technical indicators hinted that the altcoin might fall slightly, before a major move fuels a price rally.
Over the last 24 hours, Pi [PI ] has been on a downtrend, with the altcoin falling by 2.85%. This drop came on the back of another downside move, one that saw PI lose 13% of its value in just one month.
However, can the price charts take a turn for the better?
Yes. According to AMBCrypto’s analysis, the crypto could stage a turnaround. In fact, at the time of writing, new technical indicators appeared to reveal a clear path for PI to regain some bullish momentum.
How will this bullish structure play out?
An analysis of the 4-hour chart revealed that PI’s price formed a cup-and-handle pattern.
At the time of writing, the altcoin’s latest price decline followed suit after the asset was caught trading into the resistance level of the handle.
Source: TradingView
Typically, rallies begin in full once the price overcomes the handle resistance and breaks through the dashed resistance level higher.
If a breakout above the higher resistance level occurs, PI will see a rally similar in size to the previous downside drop that formed the pattern’s bottom. This could potentially amount to gains of 24% if the altcoin reclaims the $0-48-level on the charts.
A dip before the boom?
At press time, the Moving Average Convergence and Divergence (MACD) indicator was firmly in negative territory, with the Signal Line below the blue MACD line. On the contrary, the histogram’s shift from thick to light orange suggested that selling volume may be fading and buyers might be stepping in gradually.
Such a pattern often alludes to the likelihood of a rebound. Particularly if the crypto is trading towards the support level on the bullish pattern’s handle.
Source: TradingView
Additionally, the Money Flow Index (MFI) appeared to be heading towards the positive zone too. If it crosses into positive territory, it would mean more liquidity within the market.
These inflows could add to the bullish momentum and increase the potential for a significant price upswing in the coming days.
A case of bullish sentiment
Finally, Community Sentiment data revealed that 82% of 4.2 million investors are expecting a rally soon.
When most market participants expect a bullish run, the probability of a rally rises. Especially since these investors often drive liquidity higher.
Hence, PI is likely to follow that path. Traders must still be aware though since broader market conditions will influence whether and when this rally materializes.
