Pi Network Faces Significant Challenges as Its Native Cryptocurrency Continues to Face Downward Pressure

Pi Network is experiencing significant challenges as its native cryptocurrency continues to face downward pressure.

Pi Network is currently facing significant challenges as its native cryptocurrency, PI, continues to be battered. The project, known for its mobile-mining initiative and broad community involvement, sees its token price slide further and trading volume take a hit.

Amid this price action, community frustration is brewing over the Core Team's communication style and administrative practices, which could be a critical factor in the project's ability to overcome the difficulties it's encountering.

PI price sheds another 4%

PI price dropped by another 4% in recent trading, taking it below the $0.70 threshold. This continues a downward trend for the token, which has now lost 20% of its value over the past seven days.

Trading volume also took a substantial hit, plummeting 52% to $148 million. This signals a rapid decline in interest from market participants in the token.

The price movement formed a classic falling wedge pattern, with PI currently testing the lower boundary of this pattern at around $0.687. For any potential reversal, the price would need to break above the $0.71-$0.72 range with strong volume.

Community dissatisfaction grows over administrative practices

A significant factor behind PI's struggles appears to be the growing frustration among community members with the Core Team's communication and administrative practices.

Despite the team recently announcing the success of the inaugural PiFest on the Open Network, which reportedly saw the participation of over 125,000 registered sellers and 1.8 million Pioneers, members of the Pi community expressed skepticism toward these figures.

One community member, known as Dr. Altcoin, pointed out that since the PiFest began, Pi trading activity within the ecosystem has reached its lowest levels. Most transactions involved people selling Pi for cash.

They added that the administrative practices of the Pi Core Team remain the same as they were during the closed mainnet phase. The monthly updates are becoming predictable and insufficient for maintaining an engaged community in the long term.

Many users are now calling for more transparent communication from the development team and potentially new leadership with deeper cryptocurrency expertise.

This disconnect between the administrative arm of the project and community members could be a major obstacle to the project's recovery.

Is interest in Pi Network waning?

To add to the network's troubles, it has reduced its base mining rate again this month, decreasing it by 1.18% to 0.0029030 π per hour. This continues a trend of gradual reductions in mining rewards.

Some community members have suggested that this reduced interest in mining may be related to Pi's currently low trading value on exchanges, creating a kind of feedback loop between mining participation and market value.

Despite rumors of potential listings on major cryptocurrency exchanges like Binance and Coinbase, no such developments have yet materialized. While BTCC exchange reportedly added Pi for spot trading, this news failed to generate any positive momentum for the token's price.

Technical analysis outlook: Further weakness expected

From a technical analysis standpoint, the outlook for PI appears increasingly bleak. The token is just 14.9% away from its all-time low of $0.6152, which was reached on February 20.

Recent price action shows PI briefly finding support at $0.6800, but momentum indicators suggest this was only a temporary respite, and the token would need to climb by 6.3% to have another chance at reversing its downtrend.

A Fibonacci retracement study reveals that the bears may have set a liquidity trap, as the token surged above the 61.8% Fibonacci level before collapsing shortly after. This pattern typically indicates the continuation of a downtrend rather than its reversal.

Should the current support level at $0.6800 fail to hold, there appears to be little standing in the way of PI reaching new all-time lows.

KYC changes and broader crypto community backlash

Recent changes to the network's Know Your Customer (KYC) protocols have also alienated parts of the community. The project has recently announced that it will be adding email-based two-factor authentication to the overall account management and verification.

This move is being made to address challenges with current SMS (text message) account verification, improve account security, and prepare for future integration with the Stellar blockchain. However, this announcement has sparked controversy.

Many crypto enthusiasts value anonymity and privacy, and they see KYC requirements and email-based 2FA as intrusions into their online autonomy. In an industry that is often critical of centralized institutions and overreaching surveillance, these additions to the Pi Network are being met with skepticism and, in some cases, hostility.

This backlash comes on top of earlier criticisms regarding Pi's decision to require users to undergo KYC procedures in order to migrate their tokens from the closed mainnet to the open mainnet. Such administrative choices are often at the center of community debate