Pi Coin has recently attempted a short-term recovery following a period of weakness, registering modest upward movement. While buying interest has seen an improvement, the overall macroeconomic outlook remains cautious.
Technical indicators suggest that the recent uptick may merely be a corrective phase, potentially leaving the altcoin vulnerable to renewed downward pressure if buying momentum falters.
Investors in Pi Coin are displaying signs of optimism; however, a hidden bearish divergence is emerging on the price chart. Between December 19 and January 3, the price recorded a lower high, while the Relative Strength Index (RSI) indicated a higher high. This divergence suggests that the upward momentum lacks robust underlying support.
Typically, hidden bearish divergences manifest during corrective rallies within broader downtrends. Despite the short-term bullish sentiment, underlying selling pressure persists, signaling that the primary bearish trend may resume as buying interest wanes, heightening the downside risk for Pi Coin.
Macro indicators present a more nuanced perspective. The Chaikin Money Flow (CMF) has risen above the zero line, reaching a near-monthly high. CMF is a volume-weighted measure of capital flows, serving as a reliable indicator of investor commitment during uncertain market conditions. An increasing CMF implies sustained accumulation rather than speculative buying spikes.
This accumulation has contributed to recent price stability, effectively limiting deeper losses and offering Pi Coin a temporary buffer against broader market volatility.
Currently, Pi Coin faces a significant challenge at the $0.214 resistance level. This price point corresponds closely with the 23.6% Fibonacci retracement level, enhancing its importance. The multiple rejections near this threshold underscore persistent selling pressure from traders looking to defend their higher cost basis.
To break free from the bearish momentum, a decisive shift is required. A sustained close above $0.214 would signal a trendline breakout, potentially paving the way for upward movement toward $0.226, particularly if volume increases and market sentiment improves.
If Pi Coin fails to sustain its bullish momentum, it may face renewed declines. A drop below $0.207 could trigger accelerated selling, testing the critical support level at $0.199. If buyers cannot defend this level, the prevailing bearish outlook is likely to be reinforced.
