PI Network big dump lost the 0.28 USD level, KYC acceleration policy triggered a dumping wave

The price of PI Network (PI) coin was heavily impacted on September 23, experiencing a single-day big dump of over 20%, causing panic among investors. The newly launched fast-track KYC policy combined with record-high exchange coin holdings created a perfect storm, and analysts warned of the potential for further fall risks, but the oversold indicators also suggested a possible technical rebound.

PI price crash: Multiple factors trigger a sell-off

(Source: CoinMarketCap)

PI has experienced an astonishing price fall over the past 24 hours, currently reported at 0.2720 USD, down 21.87% from the previous day. This drastic fluctuation occurred simultaneously with the key validation update of the project's implementation, which was originally intended to simplify the process of migrating the token to the mainnet.

"This is a typical case of 'sell on good news,'" said a cryptocurrency analyst. "The market's reaction to the simplification of the KYC process is not to increase buying, but to accelerate profit-taking."

Multiple factors contributed to this price crash:

Exchange coin holdings hit a new high: Exchange balances increased to a record 446 million PI tokens, with nearly half stored on the Gate platform, indicating that a large number of investors may be preparing to sell.

Upcoming Token Unlock: Next month, over 137 million tokens will be unlocked, with 13.1 million tokens unlocking on October 1st, increasing the supply pressure in the market.

KYC process simplification: The newly launched fast-track verification has increased efficiency but also accelerated the migration of tokens to the mainnet, further increasing the tradable supply.

Technical indicators show that the Relative Strength Index (RSI) has fallen to around 29, entering the Oversold zone, which may indicate the possibility of a technical Rebound in the short term. However, fundamental pressures still exist, which may limit the extent of any rebound.

Fast Track KYC: Double-Edged Sword Effect

The core team of PI Network recently launched the Fast-Track KYC automated verification process, aimed at speeding up the verification of eligible users and allowing pre-mined tokens to migrate to the mainnet without intermediaries. This update eliminates the previous requirement of 30 mining sessions, significantly lowering the participation threshold.

"The automated verification process should have been a positive development," explained a blockchain consultant, "but in the absence of strong demand and liquidity arrangements, it has instead accelerated the influx of tokens into the market, creating selling pressure."

According to the official announcement, pioneer users will receive a notification to start verification in their wallets. Users now have two verification options:

· Complete verification through Banxa in a few minutes, but this method requires purchasing a certain amount of tokens.

· Choose fully on-chain verification, no need to rely on third parties.

These changes are aimed at reducing waiting times and freeing up human resources while maintaining identity verification standards. The automation features will speed up wallet launch times and accelerate the testing of applications prior to the mainnet. The team has linked this upgrade to the 100 dApp bundles that are ready for evaluation in the mainnet environment.

Market Supply and Demand Imbalance: The Root of the Liquidity Crisis

The core issue facing the PI Network is the severe imbalance between market supply and demand. Although the simplification of the verification process may benefit the ecosystem's development in the long run, in the short term, it has exacerbated supply pressure, while demand has not increased correspondingly.

"PI Network needs real liquidity and to be listed on more mainstream exchanges," a cryptocurrency market strategist pointed out. "If demand does not increase or is not matched with the liquidity arrangements of the exchanges, the migration of the token to the mainnet will only immediately increase the supply, further lowering the price."

This situation has created a dilemma: the fast-track KYC reduces operational friction, but it does not automatically offset the sell-off pressure from unlocking and transferring to the exchange. In fact, it may have inadvertently accelerated this process.

Community Reaction Divergence: Opportunity or Risk?

The reaction of the PI Network community to this price fall is clearly divided. Some users see this as a good buying opportunity, believing that the current price has significantly undervalued the project's long-term potential.

"In this oversold condition, PI may be one of the most undervalued crypto assets in the market," a community member stated in the forum, "the core team is making substantial progress, and this is just a temporary adjustment in the growth process."

However, another group of users expressed concerns, calling for a clearer token migration timeline and listing plan. "Without a clear roadmap and liquidity strategy, prices may continue to fall," warned a long-term holder.

Analysts point out that whether PI Network can stabilize its price will depend on its ability to translate verification improvements into three concrete outcomes:

· Launch on more mainstream exchanges to increase liquidity

· Implement a planned liquidity management strategy to balance supply and demand.

· Develop applications and use cases that support actual needs

Technical Analysis and Future Outlook

From a technical perspective, PI is currently near a critical support level. If the price cannot stabilize around $0.27, it may further fall to the psychological levels of $0.25 or even $0.20.

"The RSI is in the oversold region, which usually indicates a potential short-term rebound," explained a technical analyst, "but given the substantial fundamental pressure, any rebound may be short-lived unless we see significant improvements on the project side."

In the long run, the challenge faced by the PI Network is to strike a balance between deployment speed and measures to control sell-off pressure. The core team needs to accelerate the development of the application ecosystem while implementing more effective token economic models to attract and retain long-term investors.

"The future of PI Network depends on its ability to transition from a purely mining project to an ecosystem with real application value," summarized a blockchain expert, "this requires time, but more importantly, it requires a clear strategy and execution."

Investors should closely monitor developments in the coming weeks, particularly the upcoming token unlock event on October 1, and any potential measures the core team may take in response. Before this, market volatility may persist, and caution and risk management will be key.