Can the issued tokens join the rally of the market?

Coin held steady at $0.20, rebounding over 1% the day before. The Fear & Greed Index rose from 31 to 52, turning neutral, indicating a market sentiment recovery. On Tuesday, it increased by 1.55% driven by CPI figures below expectations and a draft crypto bill, with BTC returning to $95,000. Technically, RSI remains neutral at 50, MACD avoids a death cross but the decreasing histogram suggests waning bullish momentum.

Market Sentiment Recovery Driven by Three Main Factors

(Source: CMC)

Coin recovered from a 1% decline earlier this week. This rebound aligns with the overall market recovery trend, driven by U.S. core Consumer Price Index (CPI) figures below expectations and a Senate draft bill proposing new regulations for the crypto market structure. The bullish sentiment in the crypto market is evident in the Fear & Greed Index, which has risen to 52 from 31 on January 1, indicating a shift from fear to a more neutral market mood.

The Fear & Greed Index is a key indicator of overall crypto market sentiment. Generally, values above 60 indicate greed, 40 to 60 reflect neutrality, and below 40 signify fear. The jump from 31 to 52 marks a significant shift in market psychology. A reading of 31 indicates extreme fear, with widespread pessimism, selling pressure, and capital outflows. A reading of 52 suggests the market has moved out of panic and is in a wait-and-see or tentative buying phase.

This sentiment shift was catalyzed by U.S. core CPI data below expectations. When inflation pressures ease, the Federal Reserve’s need to raise interest rates further diminishes, creating a more favorable environment for risk assets. As a high-risk asset class, cryptocurrencies are highly sensitive to interest rate expectations. Cooler CPI data implies that the high-interest-rate environment may be nearing its end, prompting funds to reallocate into crypto markets.

Three Main Drivers of Market Sentiment Recovery

Lower-than-expected CPI: Eases inflation pressures, reduces Fed rate hike expectations, benefits risk assets

Crypto Bill Draft: Senate market structure bill provides regulatory clarity, boosting institutional confidence

Bitcoin Leading: BTC returning to $95,000 creates wealth effects, lifting the overall market

Unlike the flat price trend since the Pi Library release on January 9 (which integrated Pi Payments into Pi apps), the market sentiment-driven recovery could bring a short-term, sustained rebound. This contrast is quite revealing. Technical upgrades and application launches (like Pi Library) have failed to push prices higher, indicating that market confidence in the fundamentals of Pi coin has become numb. However, when overall sentiment improves, Pi coin, as a high-beta asset, tends to follow the upward trend, showing that its price is more driven by macro sentiment than project developments.

Technical Compression Between Support at 0.20 and Resistance at 0.26

(Source: Trading View)

As of press time, (Pi coinhttps://www.gate.com/price/pi-network-pi) has stabilized around $0.2100 after rebounding from a local support trendline connecting the lows on December 17 and 30. The Relative Strength Index (RSI) on the daily logarithmic chart is at 50, remaining near the midpoint, indicating a lack of clear momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) hovers above the signal line, avoiding a death cross, but the declining histogram shows weakening bullish momentum.

An RSI at 50 is a critical neutral level. Above 50 generally favors bulls, below 50 favors bears. Being exactly at 50 suggests a balance between buyers and sellers, with the market in equilibrium. This balance usually doesn’t last long—either breaking upward into a bullish trend or downward into a bearish one. Pi coin is currently at this pivotal crossroads.

The MACD status offers more nuanced information. Staying above the signal line to avoid a death cross is positive, as a death cross often confirms a trend reversal. However, the decreasing histogram indicates that bullish momentum is waning, with buying strength less robust than before. This “avoiding deterioration but not showing improvement” state makes Pi’s short-term direction uncertain.

If Pi breaks above resistance levels, including the 50-day exponential moving average (EMA) at $0.2149 and the December 19 high at $0.2177, the rally could extend toward the September 23 low at $0.2613. Achieving this would require about 24% gains (from 0.21 to 0.2613), which is feasible for a volatile asset like Pi. However, success depends on effectively breaking through the resistance at 0.2149 and 0.2177, requiring volume support and continued positive market sentiment.

Conversely, if it falls below $0.2000, it may test the October 11 low at $0.1919. The risk in this downside scenario is that $0.1919 is a key low since Pi’s mainnet launch; losing this level could lead into uncharted territory, potentially triggering panic selling. Therefore, holding above $0.2000 is crucial from a technical perspective.

From a technical standpoint, due to the lack of momentum confidence, Pi remains vulnerable to supply pressure. This “supply pressure sensitivity” stems from tokenomics issues: over 1.2 billion tokens are set to unlock this year, flooding the market with supply and continuing to suppress prices. Even if sentiment improves, accelerated unlocking could prevent price breakthroughs.

Pi’s current situation exemplifies a “macro positive, micro negative” scenario. On the macro level, overall crypto market sentiment improvement provides a bullish environment for Pi. But on the micro level, issues like token unlocks, absence from major exchanges, and weak application ecosystem remain unresolved. This contradiction suggests Pi may follow the market’s slight rebound but is unlikely to see a significant independent rally.