Over the past couple of months, PancakeSwap’s native token CAKE has shown a consistent upward trend following a significant dip in August. The recent surge in buying activity has propelled the coin higher, but the question remains: can buyers leverage this momentum to break through key resistance levels?
Recent Market Performance and Analysis of Exponential Moving Averages (EMAs)
CAKE has experienced a notable increase in price over the last two months, establishing a trendline for support that has helped sustain its positive momentum. Despite this upward trajectory, CAKE continues to face challenges in surpassing the 200-day EMA, which currently stands at $2.137.
As of the latest update, CAKE was trading at $1.9, slightly above the 20-day EMA of $1.887 and the 50-day EMA at $1.873. These EMAs act as immediate support levels, influencing the price action within their respective ranges.
The current uptrend visible on the daily chart resembles a bearish flag pattern, indicating the potential for further downward movement if the price fails to hold above the established trendline support. A breakdown below the parallel lines and the critical $1.7 support level could signal a descent towards the $1.5 range.
If a sudden surge of bullish sentiment emerges in the market, a decisive breach above the existing pattern might enable CAKE to target higher price levels.
The Relative Strength Index (RSI) hovers around the 50 mark, signifying a neutral market sentiment characterized by balanced buying and selling pressures. A significant drop below the 50 threshold could signal a shift towards a bearish outlook.
The $1.7 support level, in conjunction with the lower boundary of the uptrend channel, holds significant importance. A breach beneath this level could expose CAKE to further downside potential.
On the flip side, a breakout above the current pattern could pave the way for a retest of the $2.071 resistance level and potentially lead to a challenge of the 200-day EMA at $2.137.
Derivatives Analysis and Market Sentiment Surrounding CAKE
Derivatives data suggests a sense of caution prevailing among traders, with Open Interest declining by 6.26% to $15.25 million and trading volume decreasing by 43.37% to $15.28 million, indicating reduced trader participation following recent market volatility.
Notably, the Long/Short Ratio for CAKE/USDT on Binance stands at 2.1095, hinting at a slight bullish inclination among traders active in that market. Similarly, OKX records a Long/Short Ratio of 2.4095, pointing towards a positive outlook from traders on these platforms regarding CAKE’s short-term prospects.
Leading traders on Binance exhibit a relatively bullish stance, with a long/short ratio of 1.8477, indicative of their positioning for potential upward movements in the market. However, it is essential to monitor broader market sentiment, as fluctuations in Bitcoin’s price can significantly impact CAKE’s trajectory.