CAKE’s strong buying pressure is evidenced by consecutive bullish candles on its daily time frame. This moves the altcoin towards support from the key $3.5 resistance level. In early January, CAKE’s bullish trend faltered at $3.5 resistance, resulting in a 35% retracement.
However, the bullish sentiment in the market sparked by Bitcoin approaching a new all-time high has translated into another uptrend for altcoins, including CAKE.
PancakeSwap: A low-fee DEX for retail investors
CAKE is the native token of PancakeSwap, a decentralized exchange (DEX) on Binance Chain. PancakeSwap acts as an automated market maker (AMM) and CAKE acts as a utility token to incentivize the supply of liquidity on the DeFi platform.
As retail investors pile into another bull market, demand for CAKE begins to rise. This is because low-cap investors, hoping to avoid Ethereum’s high gas fees, are flocking to low-fee chains such as Binance Chain.
PancakeSwap is currently recognized as the largest DEX on the Binance Chain, with a current daily trading volume of over $100 million. This makes it the perfect decentralized exchange for retail investors, translating into critical demand for CAKE.
Long Opportunities Can Bring 40% Gains
Analyzing CAKE’s capital inflows on the daily timeframe shows that its inflows peaked in 2024 with a reading of 0.25. Likewise, the relative strength index (RSI) highlights buying pressure as it approaches overbought territory.
All in all, it reveals the dominance of buyers on the CAKE price chart. With the key price resistance at $3.5 broken, buyers can take advantage of this to find new buying opportunities.
A retest of new support at $3.5 and the emergence of a strong bullish candle on the daily time frame will serve as an entry signal. This could result in a potential short-term profit target of $4 (15% gain) and a long-term profit target of $5 (40% gain).
Alternatively, if the price fails to close above new support, CAKE could trade in a range between $3 – $3.5, with the possibility of a pullback before another bullish move.
