Conventional adaptive optics (AO) systems using gradient wavefront sensors and linear least-squares reconstructors, perform very poorly when light has propagated through strong atmospheric turbulence. This is due to vortices in the wavefront that cannot be reconstructed using the least-squares method. One solution to the problem is to use non-linear reconstructors, however a second solution is to use direct wavefront sensors that circumvent the reconstruction problem. Direct wavefront sensors are simple self-referencing interferometers that directly measure the phase difference between a reference beam and an aberrated one. In this study the viability of a point-diffraction interferometer for a closed-loop atmospheric AO system was tested. A point-diffraction interferometer was built using a modified Mach-Zehnder set-up. The system was used in closed-loop using a ferroelectric SLM to produce the aberrated wave after correction. The SLM was used to emulate a corrective device that corresponded to a square, 12x12, piston-only segmented mirror with a stroke of ±π. Its performance was tested for the case of atmospheric turbulence aberrations. Both uniform intensity, and scintillated cases were looked at. The investigation showed, through simulation and experiment, that the point-diffraction interferometer worked in closed-loop operation in both uniform intensity and scintillated aberrations. Its robustness in the presence of phase discontinuities makes it a promising option for wavefront sensing in strong scintillation.