The crypto market is trying to make a broader rally, meanwhile tokens that have gained massive popularity lately, such as CAKE from PancakeSwap, are going with the flow.
At the time of this writing, CAKE is trading at $ 17.65, accumulating a gain of 6.07% in the last 24 hours. And with a market capitalization of $ 2.951 billion, it ranks 39th in the crypto ecosystem.
PancakeSwap is an automated market maker (AMM), which offers a decentralized exchange in which liquidity is obtained through the pools of coins that the users themselves assemble.
Those who deposit liquidity in this AMM obtain rewards in CAKE, a currency that in addition to incentivizing, also functions as a governance and payment method for various functionalities of the platform.
The popularity of this DeFi has been increasing rapidly in recent months, as Ethereum users seek cheaper alternatives to interact with decentralized protocols.
A month ago CZ, the CEO of Binance, alerted us of a great milestone for this platform. The number of daily transactions on PancakeSwap had exceeded the daily total on the Ethereum network.
Right now the success remains intact, because while 1.32 million transactions were made on the ETH network in the last 24 hours, on the pancakes and rabbits platform there were 4.42 million transactions in the same period of time.
PancakeSwap platform data. Source: PancakeSwap.
Despite the resounding success, CAKE could not escape the great bearish tide that has been experienced recently in the crypto market.
PancakeSwap is less than a year old, and due to the risk posed by such a young token, it was one of the most affected by the decrease in exposure from investors.
The price plummeted as much as 78% during the recent crash. However, for those who remained in hold from the lows, the fall is not really worrisome, since we are talking that even with all the recent loss, this token still accumulates a gain of almost 10,000% from the historical low of $ 0.187.
There is undoubtedly a dominant bullish force. Right now the price drop seems like a simple correction, totally necessary, and that seems to have reached its bottom.
The big rejection of low prices, and a candle close above the 61.8% Fibonacci level, tells us that a new momentum may be starting, one that could take the price quietly to new all-time highs.
In case this is the case, the minimum target is at $ 57. Higher up, the next take-profit level may be at $ 68.
In the weekly time frame we see how the price got ground in a support near $ 9, same where previously the momentum that took the price to the all-time high of $ 44.13 began.
We are now seeing a nice relief rally, but it still does not show an effective resumption of the trend.
The support lost at $ 21.45 should be recovered, to think that the bearish intentions are not going to last any longer.
When we went down to the daily chart we noticed a clear short-term bearish tilt, but one that has already started to show exhaustion.
Following the recent steep drop towards $ 9, the price appears to have drawn the bottom of a Shoulder Head Shoulder, a chart formation indicating a reversal.
To confirm that this figure will lead the price higher, the descending neckline must be traversed. But the most reliable confirmation is the break of the resistance at $ 21.45. At the moment this scenario seems the most likely.
In the event that support is lost at $ 14.69, we would see a selling pressure accentuating, taking the price to the low zone recently reached. Even with this happening, if the support at $ 9 is not lost, the bullish narrative in the medium term remains intact.
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