The cryptocurrency Pi Coin has recently seen an influx of investment, suggesting a potential recovery from previous downturns. However, this uptick in buying interest is tempered by underlying risks that investors should consider.
Currently, Pi Coin is demonstrating signs of a hidden bearish divergence on its price chart. An analysis of price movements between December 19 and January 3 reveals that while the price reached a lower high, the Relative Strength Index (RSI) posted a higher high. This discrepancy indicates that the recent upward price activity may lack robust support, hinting at a possible continuation of the prevailing bearish trend.
Despite a temporary sense of optimism among investors, the overall market sentiment remains cautious. The hidden bearish divergence typically arises during corrective rallies within larger downtrends, suggesting that if buying interest dissipates, Pi Coin could face renewed selling pressure.
On a broader scale, macro indicators present a more nuanced outlook. The Chaikin Money Flow (CMF) has recently moved above the zero line and reached a near-monthly high. The CMF is a valuable tool for tracking volume-weighted capital flows, giving insights into investor commitment during volatile market conditions. The upward movement in CMF seems to signify ongoing accumulation, suggesting that investors are willing to engage financially despite the mixed technical signals.
This accumulation trend has contributed to price stability for Pi Coin, offering a buffer against significant losses in a tumultuous market environment. However, the immediate challenge lies in overcoming the resistance level at $0.214. This price point aligns closely with the 23.6% Fibonacci retracement, adding to its relevance.
Recent price actions have shown multiple rejections near this resistance level, indicating persistent selling pressure from traders who are looking to protect their investments at higher cost baselines. For Pi Coin to escape the current bearish momentum, a decisive breakthrough above $0.214 is necessary. Such a move could signify a trendline breakout, potentially paving the way toward higher price targets.
Conversely, failure to maintain the bullish momentum may lead to accelerated declines. A drop below the $0.207 threshold could trigger further selling, with a critical support level at $0.199 likely to come under scrutiny. If buyers cannot defend this vital level, the bearish sentiment surrounding Pi Coin may be reinforced.
As the market landscape continues to evolve, investors should remain vigilant and consider these dynamics when assessing their positions in Pi Coin.
