Pi Coin is currently "losing momentum" and at risk of falling to a low of 0.32 USD.

Pi Coin has been unable to maintain its bounce back in recent days, causing investor confidence to waver. While Bitcoin remains strong above the $110,000 mark – an important psychological and technical support level – Pi Coin's divergence from the overall market trend is raising concerns about the short term outlook for this altcoin.

Pi Coin is gradually losing its connection with Bitcoin

Currently, the correlation coefficient between Pi Coin and Bitcoin is only at 0.12 – a very low number, indicating that Pi is moving almost independently of the world's largest cryptocurrency. This increasingly evident divergence occurs in the context of Bitcoin maintaining a stable trend, making Pi's separation a negative factor rather than an advantage.

Instead of benefiting from the strength of the overall market, especially from the sustainability of Bitcoin, Pi Coin is facing a wave of sell-offs and a erosion of investor confidence. This is causing downward pressure to increase and the likelihood of continued weakness to become clearer than ever.

The correlation between PI and BTC | Source: TradingView## Technical pressure increases – Volatility is approaching

Current technical signals also do not bring much hope. The Squeeze Momentum Indicator is issuing a warning signal with black dots – a sign that a major volatility is about to occur.

According to market history, when this indicator shows black dots, it usually signals that a "squeeze" phase is about to end – and when this compression is released, prices tend to fluctuate sharply in a clear direction. However, in the current context, with market sentiment leaning heavily towards a downtrend, a breakout is more likely to cause Pi Coin to slide deeper rather than bounce back.

Squeeze Momentum Indicator of PI | Source: TradingView## Important support levels

As of now, Pi Coin is trading around $0.347, just slightly above the key support zone at $0.344. Maintaining this price level will be a crucial factor in determining the bounce back potential or continued decline of the coin.

If the level of $0.344 is broken, selling pressure could push Pi Coin down to $0.33, and worse, retest the all-time low at $0.32. A break below these levels would open up an unprecedented bearish zone, worsening the already bleak outlook for this altcoin.

Price chart of PI | Source: TradingView## Recovery scenario – Is there hope?

The only scenario that can reverse the current downtrend is a strong bounce back from the support area of $0.344, which would bring Pi Coin back to the level of $0.36 – the short term resistance area. However, the outlook for this possibility is very slim as new capital has not yet appeared, and the link with Bitcoin – which is the main driver of the market – is gradually being lost.

Moreover, the current trading sentiment remains quite negative. Investors are showing pessimism, concerned that Pi Coin will continue to bounce back, despite Bitcoin maintaining stability above $110,000.

In the current context, Pi Coin is facing a critical test. If it cannot maintain the important support zone, this coin will face the risk of sliding further down to lower levels. Conversely, a successful bounce back from the $0.344 level will help delay the negative scenario – but only if the cash flow returns and investor confidence improves significantly.

With the correlation coefficient with Bitcoin being low and technical indicators signaling the risk of strong volatility, Pi Coin will need more than just relying on technical factors to turn the situation around. Changes in market sentiment and positive moves from developers or the community could be essential factors to create a boost for a sustainable bounce back.

Pi Coin is in a precarious situation. Without a clear improvement in capital flow and market sentiment, a deep decline scenario will be the dominant trend in the short term. With the current technical indicators and weak correlation with Bitcoin, investors need to exercise particular caution when making trading decisions at this time.

Taylor