Over the last 24 hours, PancakeSwap’s native token, CAKE, has experienced a remarkable uptrend, soaring by 53% and accumulating weekly gains exceeding 100%. This upsurge comes after a recent downturn in its price performance.
Analysis by CryptoCrypto suggests the likelihood of further price appreciation, supported by favorable metrics such as Total Value Locked (TVL) and transaction fees on the platform showing positive momentum.
However, there remains a possibility of a corrective phase in the near future.
Anticipating a Temporary Pause Before Resuming the Upward Trend
CAKE serves as the utility token for PancakeSwap, a decentralized exchange associated with the Binance Smart Chain network.
Following a significant price surge, CAKE managed to break through major resistance levels at 2.414 and 2.816, as outlined by the Fibonacci Retracement Line.
Despite this breakthrough, the token struggled to surpass the 3.217 resistance barrier and is currently undergoing a corrective phase, leading to a downward trend.
The Relative Strength Index (RSI) has entered the overbought territory, indicating an overvaluation with the current RSI at 75.24 and implying a potential price correction.
Utilizing the Fibonacci retracement tool, it is anticipated that a price retracement could drive the asset back to 2.816 or even lower to 2.414. These levels are likely to act as support levels and propel a price recovery from the current position.
Optimistic Outlook Prevails
A scrutiny of the Total Value Locked (TVL) metric, which gauges the total value of assets staked in the platform, showcases a significant upsurge on PancakeSwap.
Within the past 24 hours, TVL spiked by 15.91%, now standing at $1.857 billion, marking a new monthly peak for February.
If this trajectory sustains, TVL could potentially surpass $2.003 billion, a yearly high for the platform.
The positive momentum is further reinforced by the increase in transaction fees generated on PancakeSwap. In the last week, the platform generated $50.04 million in fees, with an additional $8.43 million in accrued fees over the past 24 hours, as reported by DeFiLlama.
This surge in fees signifies growing demand, which could drive CAKE’s upward movement and resurgence.
Influence of “CZ” Support for Memecoins on Momentum
Changpeng Zhao (CZ), the BSC chain’s founder, where PancakeSwap operates, recently hinted at launching a memecoin linked to his dog, potentially contributing to the recent surge in activity as traders anticipate opportunities in this space.
Moreover, CZ mentioned the possibility of engaging with memes on the BNB Chain, which could further catalyze a rally for CAKE, Pancakeswap’s native token, thereby facilitating the trading of such tokens.