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- CAKE broke out past a stern resistance level at $1.3.
- A retracement could offer a buying opportunity.
PancakeSwap [CAKE] had been in a long-term downtrend in October, but soon began to reverse its fortunes. The prices blasted past the $1.3 resistance in early November, which had been in place since August.
A technical analysis by AMBCrypto dated the 25th of October noted that CAKE was in a long-term downtrend, but a move above $1.3 would be the first sign that bulls were gaining control. This has come to pass, and CAKE reached $2.5- a level it previously traded at in May.
The confluence of multiple factors showed where bulls could look to go long
The most recent lower high on the one-day chart was at $1.179 and was breached on the 23rd of October. On the same day, the RSI, which had been resolutely below neutral 50 for many months, climbed above the neutral 50 level.
As previously highlighted, the $1.3 level was a significant resistance level for CAKE. Hence, when the bulls were able to break this resistance as well, the likelihood of a strong rally increased.
The past week’s surge to $2.5 was accompanied by a large volume of buying, as reflected in the On-Balance Volume. The Chaikin Money Flow (CMF) also showed high capital flow into the market with a reading of +0.27.
The Fibonacci retracement levels of CAKE (pale yellow) showed the 61.8% and 78.6% levels were at $1.6 and $1.36 respectively. There was a bullish breaker block (cyan box) at $1.6-$1.8 from the one-week timeframe.
Additionally, the fair value gap (FVG) denoted by the white area on the daily chart coincided with the breaker block, which marked this region as a firm support zone.
The short-term sentiment favored bears, but accumulation was ongoing
The Weighted Sentiment dipped back into the negative area after a brief foray above zero on 4 November, which suggested social media engagement was not as positive as the price action for CAKE.
On the other hand, the MVRV ratio climbed to highs not witnessed since June 2021. This could see longer-term holders sell some of their tokens for a large profit. The mean coin age has trended upward since early July. Hence, addresses continued to amass more CAKE.
Read PancakeSwap’s [CAKE] Price Prediction 2023-24
The lower timeframe data from Coinalyze revealed that selling pressure seized control over the past three days. The Open Interest (OI) has slowly but steadily declined in the past 24 hours alongside prices.
The spot CVD has been in decline since the 5th of November, and CAKE prices also began to slide lower since the 6th of November. Therefore, in the short-term, the OI and spot CVD suggested a move downward could occur for CAKE amidst selling pressure.