Pi Network (PI) coin price tumbles over 10% as concerns about token dilution mount

Pi Network's price tumbled over 10% in the past 24 hours, extending its downward trend as concerns over token dilution mount. The decline follows reports of a major token unlock

Pi Network (PI) price tumbled over 11% in the past 24 hours, extending its downward trend as concerns over token dilution continue to weigh on the token.

The decline follows reports of a major token unlock set to increase circulating supply, raising fears of selling pressure on the token. The crypto's price movements align with broader crypto market weakness, as Bitcoin (BTC) and other major assets experienced a sell-off.

Market-wide losses wiped 3.65% off the total cryptocurrency market capitalization, now standing at $2.75 trillion.

Token unlocks often lead to increased supply, raising concerns about dilution and potential price declines. Investors typically react to such events with caution, fearing that an influx of unlocked tokens could trigger selling pressure.

The wave of token unlocks scheduled for the coming years is a significant factor that could affect the token's valuation in the long term.

The token is also facing technical resistance as it broke below a symmetrical triangle pattern on the four-hour chart, a bearish indicator that could foreshadow further price declines.

The crypto's price also fell sharply from critical support at $1.88 to a recent low at $1.38, indicating strong selling pressure.

If Pi fails to defend the crucial $1.20 support level, it could open the door for a continuation of the downtrend, potentially setting the stage for a drop to the $0.75 mark, according to Crypto Diplomat.

"We’re seeing some massive price drops in the crypto market today. BTC broke the $100k support and is currently trading at $97k, while ETH fell below $7k to hit lows of $6,500. As a result, we’re seeing altcoins post triple-digit percentage losses," the analyst noted.

Trader Zoe, identified on X as Zoe, also highlighted the breach below key support at $1.65, adding that Pi Coin could find temporary relief if it holds above the $1.20 support level.

"Still holding out hope for a bounce on IVR but if we close below $1.20 we baaaad. Also, if it helps any of you visualize, we're still in the process of filling the fair value gap between $1.20 and $1.38. These gaps usually serve as liquidity zones that attract price action," analyst Coinvo stated.