The PancakeSwap price is consolidating between two major moving averages. But the pressure could be building for an upside breakout.
PancakeSwap (CAKE) is marginally lower this morning, trading at $18.22, down $0.1026 (-0.56%).
Decentralized finance (DeFi) application PanacakeSwap has been a relative outperformer over the last three weeks. The return of confidence and, more importantly, buyers to the cryptocurrency market has lifted CAKE around 70% from its 20th of July low.
As a result, the market maker has increased its market cap to more than $3.7 billion, ranking it as the 31st-largest crypto.
Furthermore, the project’s Total Value Locked (TVL) assets have surpassed $9 billion, an increase of $3b in recent weeks, which may provide a positive catalyst for the price.
The price chart shows a clear trend line at $10.20 has reversed corrections this year. This should be viewed as the pre-eminent support level and essential to the price’s long-term prospects.
The 50-day moving average offers additional support at $14.50, and more importantly, the 200-day at $16.56 underpins the price.
However, so far, the rally has failed to clear the 100 DMA at $18.42 decisively. This is the immediate resistance and considering it rejected the bounce from May’s crash, a significant barrier.
That being said, if the PancakeSwap price closes above $18.42, it has the potential to go much higher. On a breakout, the first target is June’s $21.60 high. And should that fall, there really isn’t much technical resistance until the May $47.68, all-time high.
Of course, this scenario requires a large influx of capital to the market in general. And whilst we are yet to see that, there are some encouraging signs that the asset class is returning to favour.
However, if CAKE falls below the 200 DMA at $16.56, it may signal a return to the trend line support.