Pi Coin price unaffected by scam shock — Strong support or slow reaction?

Pi Coin (PI) is trading around $0.203, up about 1% in the last 24 hours and virtually unchanged from last week. This comes right after a major scam that usually causes many people to panic and sell off their holdings. However, the price of Pi Coin remains stable.

This raises the question: Is Pi Coin holding steady due to genuinely strong support, or has the market simply not reacted yet?

Discount channels are seeing mixed cash flow signals amid the scam shock.

A recent large-scale scam resulted in the loss of over 4.4 million PI through Pi Network's payment request feature.

The Pi Core development team asserts that this is not a protocol error but rather a social media scam, as coin transfers only occur with user consent. As the amount of stolen funds increased, with some wallets linked to 700,000–800,000 PI stolen each month, the development team temporarily disabled the payment request feature to prevent further abuse.

Typically, when security news like this breaks, the market experiences a sharp sell-off. However, Pi Coin has remained around $0.204, virtually unchanged despite trading within a downtrend channel.

Pi Coin has been trading within a descending price channel since October 27, 2023. Both trend lines of this channel are quite weak due to few touches, but the lower trend line is currently receiving more attention. The price of PI is close to the Dip of this channel, which often Vai as a support zone during price drops. If this support zone is broken, the price structure will be disrupted. If it holds, it acts as a fulcrum for the price.

The Money Flow Index (MFI), used to measure buying pressure through price and volume, explained why Pi Coin did not plummet after the scam news emerged. From December 19th to December 29th, 2023, the price of PI tended to decrease, but the MFI increased, indicating a bullish divergence.

This data shows that many retail investors took advantage of the price drop to buy in, helping Pi Coin to avoid breaking the lower support line of the price channel.

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However, this support is not yet truly solid. On December 29, 2023, the MFI crossed below the uptrend line. Currently, the MFI is around 46. If it falls below 37 and forms a new Dip , buying pressure will weaken. If this happens, Pi Coin will lose the cushion that protected its price against the scam news.

The large cash flow is still providing support, at least for now.

The Chaikin Money Flow (CMF) index, which tracks large money flows through volume fluctuations, also shows positive signals. Currently, the CMF has reversed its upward trend and is staying above 0. Notably, during the period from December 20th to December 31st, 2023, when the PI price decreased, the CMF increased, suggesting underlying accumulation by large institutions.

Typically, this signals that large investors are accumulating holdings and absorbing selling pressure. The last time the CMF surpassed 0 and remained above it for several sessions in November 2023, the price of Pi Coin surged by 31% before cooling down.

Thus, the technical indicators are no longer in agreement. The MFI shows that buying pressure during price declines has weakened, while the CMF indicates that there is still accumulation pressure from institutions.

As long as the CMF remains above 0, Pi Coin has reason to maintain its current price. If the CMF falls below 0, the downtrend channel will become more dangerous and a late sell-off could occur due to the impact of the scam news.

That's why the market has remained relatively calm so far. Technically, Pi Coin still has enough support to delay panic, but the signals are showing signs of divergence. This is also how slow reactions often occur in the market.

Key price levels for Pi Coin will determine whether the support zone holds.

At this point, all attention is focused on the price levels within the downtrend channel.

If Pi Coin regains the $0.217 mark , the price will return to the middle of the descending channel. This would be the first sign that support isn't solely psychological. If it holds this level, the price could rise to $0.236. If it surpasses $0.283, Pi Coin will break out of the descending channel and end the negative trend, shifting to a neutral state. However, this strong upward scenario currently lacks sufficient basis.

Conversely, the risk of price declines is becoming clearer.

If Pi Coin breaks below the crucial support level of $0.195, the price will officially lose the lower support line of the descending channel. This is a key area where whales are likely to have accumulated coins.

If this zone is breached, the price risks falling to $0.182. If it continues to fall below $0.182, the market will confirm the breakdown of the descending channel, and the next target could be $0.160.

This creates two distinct scenarios:

If the MFI remains stable and the CMF continues to rise, Pi Coin could repeat the price action seen in November and attempt to break above the $0.217 and $0.236 levels.

If the MFI falls below 37.8 and the CMF returns below 0, whales will stop accumulating Token, and the scam shock could be reflected in the price. This scenario would open up the possibility of a downward correction to around $0.182 or lower.

Currently, the chart shows why prices didn't drop sharply immediately upon news release. However, the same chart also shows that a delayed reaction can still occur.