In recent months, the cryptocurrency market has seen turbulent shifts, with one particular altcoin, Pi Coin, catching the attention of both retail and institutional investors. Despite a small recovery of just over 1% in the last 24 hours, Pi Coin’s value remains 20% lower than its three-month high. However, new data suggests that dip buyers have stepped in, offering some hope amid bearish patterns.
Money Flow Index (MFI) Shows Positive Divergence
The downtrend in Pi Coin began to stabilize between December 19 and December 25, coinciding with a notable bullish divergence in the Money Flow Index (MFI). This metric, which tracks capital inflows and outflows, indicates that significant buying activity has entered the market. Despite the head and shoulders pattern pointing to potential further losses, MFI signals that buyers are absorbing sell pressure and preventing an immediate breakdown.
The Role of Chaikin Money Flow (CMF)
While the MFI showcases buyer activity, the more significant movement lies ahead. Analysts are paying close attention to the Chaikin Money Flow (CMF), which measures big money flows and institutional interest. As of now, CMF has broken out of its descending trend line, aiming for a critical zero line. If it can break and hold above this line, Pi Coin could see notable gains akin to a 10.76% rally last observed in mid-November.
However, till full confirmation through the CMF, Pi Coin’s price remains in limbo. Investors should stay cautious as the current structure is tethered between stability and potential collapse.
Price Levels to Watch: $0.182 vs. $0.218
Pi Coin’s immediate support level lies at $0.182, marking the neckline of its bearish head and shoulders pattern. If the price breaches this level, it could trigger a 25% downturn to $0.137. Conversely, a move above $0.218 would not only break the pattern but also suggest that the bullish signals from the CMF are valid. This would strengthen the bullish case and attract further buying interest.
Invest in Crypto Safely
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Final Thoughts
With Pi Coin hovering between critical levels, traders and investors should watch for two key indicators: MFI continuing its upward trend and CMF crossing into positive territory. These technical patterns could provide direction for where the asset is headed next. Until then, caution and strategic planning are crucial for navigating these uncertain market conditions.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Cryptocurrencies are volatile assets, and it’s essential to perform your own research or consult a financial advisor before making investments.
