The PancakeSwap price is not content with a 68% rally in the last 2 weeks. CAKE is eyeing up a return above $20.00, and potentially even higher.
DeFi Token PancakeSwap has staged a remarkable reversal from its June 22nd visit below $10.0000.
CAKE is trading at $15.62, a gain of close to 11% in the last 24-hours. Furthermore, a 44% increase in trading volume in the same period reinforces the rally’s credentials.
PancakeSwap, the Binance Smart Chain-based automated market maker (AMM), currently has close to $8 billion in Total Value Locked assets (TVL) and a market cap just north of $3 billion.
The latest rise in the PancakeSwap price comes as the Decentralized Exchange (DEX) completed its weekly token burn. More than 5 million CAKE Tokens have been permanently removed from supply as part of the project’s deflationary mechanism.
The resulting price reaction has lifted the token back above the 200-day moving average and cleared the path for the CAKE price to progress towards $20.00.
My report on the 12th of June asked: “is the volume telling us something?”
Well, it turns out that it was. In the three days that followed, CAKE dropped 40% to $9.5900 and briefly exceeded my downside target.
So the question is, have we just seen long liquidation and the bottom of the recent range. Or is the long liquidation just beginning?
“Should the PancakeSwap price break today’s low at $15.02, it could suggest that more liquidation will follow. This could see CAKE trade down to my worst-case scenario of $10.00.“
However, this time, the increasing volume could signify a move of similar magnitude on the upside.
The 4-hour chart is painting an increasingly positive picture. CAKE reacted perfectly to the band of horizontal support below $10.0000. Furthermore, a series of higher lows points to buyers following the price higher.
The Relative Strength Index (RSI) is uniformly trending upwards, which is certainly constructive.
On the daily time frame, the PancakeSwap price has advanced beyond the 200 DMA at $14.1167 and is in the process of tackling the 50-day average at $15.8700. The ascendant momentum on the concise time frames suggests CAKE should soon cross this threshold.
In that event, a logical area of resistance is $21.6000 – $22.0500, where the June high meets the 100 DMA.
However, should CAKE reverse below $14.0000, the outlook becomes less clear. And therefore, it would invalidate the bullish call.
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