Why did the price of Pi Network experience a big dump? App Studio's major upgrade led to a 90% fall - the truth revealed.

Pi Network (PI) developers have made significant upgrades to App Studio, aiming to make app creation more accessible, customizable, and integrated with the Pi ecosystem. However, why has the price of Pi Network experienced a big dump? The core issue lies in the enormous supply pressure brought by the daily Token unlocks, with over 1.2 billion Tokens set to be unlocked in the next 12 months.

Why App Studio Upgrade and DEX Testnet Can't Save the Price

The main news from Pi Network is that developers made significant upgrades to its App Studio on Friday. This upgrade aims to make app creation more accessible, customizable, and integrable with the Pi ecosystem. For example, the studio can now be accessed from the Pi Desktop application along with other key features such as mining apps and nodes.

In addition, this upgrade brings new features including AI-assisted customization, enabling developers to more easily create and publish applications. Moreover, the upgrade enhances discovery capabilities and introduces staking integration within the platform. The goal is to ensure a strong ecosystem, thereby granting it more practicality.

This upgrade comes a few weeks after developers launched a testnet for their decentralized exchange and automated market maker. This feature will enable developers to create DEX applications like Uniswap and PancakeSwap. Theoretically, these are significant positives that should drive prices up. However, why did the Pi Network price experience a big dump? The answer lies in the fact that the positives cannot counteract structural issues.

[Pi Network](/The price of buy-pi-network-pi) overlooks these developments, possibly because its core issues still persist. Technical upgrades can enhance potential value, but cannot change the current supply-demand imbalance. When selling pressure greatly exceeds buying interest, prices are difficult to rise regardless of how the ecosystem improves. This phenomenon is not uncommon in the crypto market, where many projects experience price declines rather than increases after significant upgrades, as the market is more focused on short-term supply and demand rather than long-term potential.

The launch of App Studio and DEX needs to attract a large number of developers to actually use and create applications in order to truly impact prices. However, based on current adoption data, the developer ecosystem of Pi Network remains weak. The global number of Pi Network market users is only 208,000, which is extremely low compared to the claimed user base of tens of millions, indicating very low real activity. Without the actual adoption by developers and users, technological upgrades are just castles in the air.

Daily Unlocking Torrent of 1.2 Billion Tokens Becomes the Capstone

The core reason for the big dump in the price of Pi Network is supply pressure. The unlocking of Pi Tokens brings millions of Tokens into circulation every day. Data shows that the network will unlock over 1.2 billion Tokens in the next 12 months. This continuous and massive increase in supply makes it difficult for any buying pressure to support the price.

Based on the current circulating supply estimate, 1.2 billion Tokens correspond to an increase in circulation of about 30-40%. This rate of supply growth far exceeds that of most mature blockchain projects. Bitcoin's annual inflation rate is only about 1.8%, Ethereum even achieved deflation after the merge, while Pi Network is facing such enormous pressure from supply growth.

The unlocking of millions of tokens every day means continuous selling pressure. Many users who receive unlocked tokens choose to sell them immediately for cash, while the market lacks enough buying power to absorb them. This imbalance of supply and demand is the fundamental reason why the price of Pi Network has experienced a big dump. Even if future technological upgrades bring practical applications, as long as the unlocking speed does not decrease, it will be difficult for the price to rebound significantly.

More seriously, the unlocking plan for 1.2 billion tokens is public, and the market has fully anticipated this selling pressure. Rational investors would choose to wait until the unlocking is completed and the price has sufficiently fallen before considering buying in, rather than going against the trend during the unlocking process. This expectation itself forms a self-fulfilling prophecy of price decline.

Moreover, the liquidity of Pi Network remains poor, with its daily trading volume still below $50 million. This trading volume is extremely weak for a project with a market capitalization of hundreds of millions of dollars. At a price of $0.2040, a daily trading volume of $50 million corresponds to approximately 245 million PI in turnover, which is a small proportion of the total circulating supply. Poor liquidity means that large orders will cause significant slippage, making it difficult for institutional investors to enter and exit, further restricting buying pressure.

Part of the reason is that most cryptocurrency exchanges have not listed it yet. Mainstream exchanges such as Coinbase and Kraken do not support PI, which severely limits its market reach. Only a few second and third-tier exchanges support PI trading, and the user base and liquidity of these platforms are far inferior to that of leading exchanges.

900 billion Token centralized shadow looms

(Source: Trading View)

Another key reason for the big dump in the price of Pi Network is its high centralization. Pi is highly centralized, with the foundation holding over 90 billion tokens. This number is extremely staggering; if calculated at the current price, the tokens held by the foundation are worth over 18 billion USD. Such concentrated holdings are extremely rare in cryptocurrency projects and are usually seen as a significant risk.

The foundation holding such a massive amount of tokens means it has absolute market control. No matter how hard the community works to push the price up, as long as the foundation decides to sell off, all efforts will be in vain. This power asymmetry puts retail investors in a very unfavorable position, making them potential victims of the foundation cashing out at any time.

Centralized holdings have also raised questions about transparency. How does the foundation manage these 90 billion Tokens? Is there a clear lock-up plan? Under what conditions will they be sold? These key questions lack transparent disclosure. In the DeFi and cryptocurrency space, transparency is the foundation of trust, and Pi Network's shortcomings in this area severely undermine investor confidence.

From a technical perspective, the daily chart shows that since the mainnet launch in February, the price of Pi Network has been in free fall. It has remained below all moving averages, and its trading volume is also decreasing. These technical indicators suggest that the price of Pi will continue to fall in the coming weeks. The downtrend is clear, and all rebounds should be seen as selling opportunities rather than buying signals.

However, the positive aspect is that the Token has formed a descending wedge pattern, which may soon trigger a short squeeze. The descending wedge is typically a bullish continuation pattern, and a strong rebound may occur when the price breaks through the upper trendline. If the issue of why the Pi Network price is experiencing a big dump is resolved in the future (such as slowing down the unlocking speed, listing on mainstream exchanges, or commitments from the foundation to lock up), this technical pattern could become the starting point for a reversal.

But the reality is that any form of technology is just empty talk before the issues of supply pressure, liquidity crisis, and centralization are resolved.