Pi Network price has crashed: 5 reasons not to short Pi Coin

Pi Network price has collapsed after peaking at $3 in February shortly after its mainnet launch. The Pi coin token has crashed to the current $0.65, down by 78% from its all-time high. This crash has erased billions of value as the market cap has crashed from over $13 billion to below $4 billion. This article explains why it is risky to short Pi coin. 

Pi Network price could surge in case of an exchange listing

Shorting is a process where investors and traders seek to benefit from an asset’s decline. The practical approach is where one borrows a cryptocurrency, sells it, and then buys it later at a lower price and pockets the difference. 

Shorting is riskier than buying an asset since its price can go up indefinitely in a process known as a short squeeze. For example, if you borrow Pi Network at the current price of $0.67 and it surges to $10, you will suffer a loss of $9.33 per token. 

The primary reason for avoiding Pi Network is that it may undergo a short squeeze if it receives an exchange listing. This is notable since Pi, despite its large size, is only listed in a handful of exchanges like OKX and MEXC. 

Therefore, there is room for major exchange listings, especially by companies like Binance, HTX, Coinbase, and Upbit. Such a move will likely lead to a significant short squeeze, as we have seen in the past few months.

For example, the Orca price jumped by over 200% in a day after being listed by Upbit. As we wrote earlier, DeepBook price also surged by over 150% after being listed by Upbit and Binance futures. 

Pi Network is a more popular coin than Orca and DeepBook, meaning that a 500% surge cannot be ruled out. 

Pi Coin has a history of short squeezes

While Pi Network launched its mainnet in February, investors were able to trade its IoU. These IOUs are tokens created in 2021 by some exchanges to give investors exposure to the token. They were not affiliated with the core team and had low volume.

History shows that these tokens regularly had short squeezes. For example, the one listed by HTX surged from below $30 in October to $99 in November, a 172% surge. It then dropped to below $50, and then soared to near $90. 

With Pi Network’s price so low, it only needs a small spark to catapult it sharply higher from the current level. 

Upcoming crypto bull run

Further, Pi Network price may benefit if there is a crypto bull run. There are early signs that this run will happen soon. Bitcoin price has jumped to $94,000 for the first time in over a month, while the market cap of all cryptocurrencies is nearing $3 trillion. 

Analysts are hopeful that a bull run is starting, with Standard Chartered experts predicting an all-time high for Bitcoin.

A likely catalyst for the crypto market rally is that Trump has said that he was not planning to fire Jerome Powell. Trump has also hinted that he was ready to talk with China on plans to solve the trade skirmish. Such a move would lead to more inflows from investors.

Pi Network may address its tokenomics

The other main reason why the Pi Network may surge is that the developers may address its tokenomics. There are signs that the developers have started to repurchase its tokens, as Dr. Altcoin has noted.