PYTH crypto could crash as potential death cross looms

Pyth Network’s price has dropped over 66% from its yearly high, and technicals point to a further downside.

As of the afternoon on May 21 (Asia time), Pyth (PYTH) was trading around $0.124, down about 3% in the past 24 hours. That’s its lowest point since April 11. The token’s market cap currently sits just above $22.7 billion.

The latest slide follows a scheduled token unlock on May 20, which released approximately 2.13 billion PYTH into circulation, valued at $275.11 million. 

The unlock, part of Pyth’s annual vesting cycle, represented 58.7% of the circulating supply at the time and was distributed to early investors, contributors, and ecosystem participants.

Following the event, Pyth’s circulating supply has surged to nearly 5.75 billion tokens, around 57.5% of its maximum supply, which is capped at 10 billion. With this unlock, approximately 36% of the total supply is now in active circulation. The final two unlocks are scheduled for May 2026 and May 2027.

Large unlocks like this often unsettle investors, as they inject a significant volume of new tokens into the market without a matching rise in demand. That imbalance can lead to downward price pressure. Even if not all recipients offload immediately, many tend to sell early, anticipating further declines.

At the same time, unlocks are often part of a project’s long-term roadmap to distribute ownership more broadly and reward early contributors. They usually mark key milestones in the development cycle.

Since Pyth’s unlock schedule was publicly disclosed well in advance, some of the impact may have already been factored in, potentially reducing the risk of a sharp, panic-driven selloff.

PYTH eyes drop to $0.10 support level

Although PYTH price has recovered slightly since the unlock event, there is a risk that the PYTH price will continue downward in the next few weeks as a death cross pattern nears on the 4-hour/USDT chart.

A death cross forms when the 200-day and 50-day Exponential Moving Averages cross each other while pointing downwards. 

In Pyth Network’s case, the spread between the two moving averages has narrowed in the past few months. Its 200-day MA  was at $0.1552, while the 50-day was at $0.1589. 

A death cross often leads to a substantial decline over time. For example, the last time that PYTH price formed this pattern was in December last year, and the coin dropped by over 76%.

On top of that, the Supertrend indicator has also flashed a red signal, adding to the bearish outlook.

If the death cross is validated, PYTH could continue falling in the near term, with $0.10 being the next key level to watch as both a psychological support and its lowest point from April.

That said, PYTH’s Relative Strength Index is currently sitting at 30, which is right near the oversold zone. This might trigger a short-term relief rally as buyers look to buy the dip, but any recovery could be temporary unless the broader trend shifts.