PI breaks out strongly: 3 important points that traders cannot miss

Pi Network (PI) has had a breakout on the daily chart on Friday, surpassing the resistance line that has been holding back the upward momentum since mid-August.

This move comes in the context of the overall market regaining momentum, with technical signals indicating a strong increase in buying demand, opening up opportunities for a new growth phase.

Market sentiment reverses as PI breaks through barriers

In the trading session on Friday, PI saw strong demand, closing the trading session at the upper line of the horizontal price channel, which has held the price steady since August 19.

The $0.3587 mark was originally a resistance level that has been broken and now turned into a support zone, marking an important shift in market sentiment.

Horizontal channel PI | Source: TradingView## PI breaks through resistance with new demand

The technical indicators of PI confirm the new demand for the token is increasing. For example, the Chaikin Money Flow (CMF) indicator of the token is currently above the zero line, reaching 0.04 and is in an upward trend, signaling buying pressure.

PI CMF | Source: TradingViewThe CMF indicator measures the strength of buying and selling pressure by tracking the flow of funds in and out of an asset over a specified period.

A CMF value above 0 indicates that money is flowing into the token, while a value below 0 indicates that money is flowing out.

In the case of PI, a positive CMF when the price is rising reflects that investors are actively accumulating tokens instead of taking profits. This trend indicates that the breakout is supported by actual demand, reducing the likelihood of a sudden reversal and reinforcing the momentum for further growth.

In addition, the recent increase of PI has pushed the price above the 20-day Exponential Moving Average (EMA), which is currently forming a dynamic support level below at $0.3545.

The 20-day EMA line of PI | Source: TradingViewThe 20-day EMA line measures the average price of an asset over the last 20 trading days. When an asset trades above the 20-day EMA line, it reflects short-term upward momentum and indicates that recent buying activity is strong enough to keep the price above the average trend.

The fact that the PI is maintained at this level indicates that the bulls are in control, and the EMA line may act as a support level for potential pullbacks. It may also provide a foundation for the token to maintain its upward trajectory.

PI targets $0.39

If demand increases, PI may attempt to break the next major resistance level at $0.3903. Successfully maintaining the price above this level could pave the way for a growth surge towards $0.4661.

Technical analysis of PI | Source: TradingViewHowever, if the sell-off worsens, the price may slide below the support level formed by the 20-day EMA and revert to $0.3391.

Vincent