3 reasons why Pi Network’s price may crash after the mainnet launch

As the Pi Network’s highly anticipated mainnet launch approaches, there are several factors that could lead to a significant drop in the price of its token once it becomes tradable. These factors involve both market dynamics and the behavior of the Pi Network’s community, and they should be carefully considered when evaluating the potential impact on the price of Pi coins.

One of the main concerns is revenge selling, which could occur after the mainnet launch. Over the past few years, Pi Network pioneers have accumulated tokens through mining on their smartphones. However, many have faced long delays in the development process and missed important deadlines, such as the Know Your Customer (KYC) verification, which has been delayed multiple times. These delays have led to frustration among users who may feel like they’ve been waiting for too long. After years of anticipation, these pioneers may decide to sell their accumulated Pi tokens all at once, leading to a significant increase in the supply on the market. This surge in selling pressure could push the price down, as there may not be enough demand to absorb the sudden influx of tokens being sold off.

Another contributing factor to a potential price crash is the tap-to-earn model employed by Pi Network. This model allows users to accumulate tokens by simply tapping a button in the app, which is similar to other projects that saw their token prices crash after their airdrops. History shows that many tokens that follow a tap-to-earn or similar reward-based system often experience a steep drop in value once they are officially launched or airdropped. A prominent example is the crash of Hamster Kombat (HMST), which lost 90% of its value after the initial airdrop, along with other projects like DOGS and Notcoin. In the case of Pi Network, pioneers who have accumulated substantial amounts of tokens over the years may feel the urge to cash out quickly once the mainnet goes live. As more users try to sell their tokens and convert them into fiat currency, it could create downward pressure on the price, causing it to fall in the early days following the launch.

Additionally, there is a possibility that seasonality will affect the Pi coin price after the mainnet launch. Many crypto assets, including Bitcoin and other major cryptocurrencies, often experience price fluctuations based on the time of year. The third quarter has historically been one of the weakest periods for the crypto market, with the summer months typically seeing lower trading volumes and less price activity. According to historical data from CoinGlass, the average Bitcoin return in Q2 is 26%, but it drops to around 6% in Q3, suggesting that this period could be unfavorable for newly launched projects like Pi Network. If the Pi coin mainnet launch occurs during this less favorable time for cryptocurrencies, combined with a potential lack of a broader market bull run, it could result in Pi’s price experiencing downward pressure.

Finally, the overall market sentiment and the performance of other newly launched airdropped tokens also play a role in the potential for a Pi price crash. If investors witness a drop in value for other projects after their mainnet launches or airdrops, they might be hesitant to invest in Pi, fearing the same outcome. This could contribute to a negative perception of Pi’s token, which might further exacerbate the downward price movement.

Overall, while the Pi Network has garnered attention and anticipation for its mainnet launch, a combination of revenge selling, the typical behavior of tap-to-earn tokens after their airdrops, seasonality factors, and the broader market sentiment could lead to a sharp drop in Pi’s price once it’s available for trading. Investors should be cautious and carefully consider these factors when thinking about the potential risks involved in holding Pi coins post-launch.