The PancakeSwap price bounced 40% from a significant support level but will need to do much more to improve its long-term outlook.
PancakeSwap is slightly higher at $13.01 (+4.00%) in early trading on Wednesday. Today’s positive price action has helped CAKE improve by 44% from the December 4th low. However, PancakSwape remains in terminal decline despite the recent recovery, weighed down by a significant descending trend line.
The decentralized exchange (DEX) token has underperformed the broader market considerably over the last ten months. Whilst many coins reached record highs in November, the PancakeSwap price peaked 55% below its all-time high. Worse still, CAKE has followed the market lower and currently trades at a 70% discount to April’s $47.68 record. As a result, PancakeSwaps market cap has fallen from $6.7 billion to $3.25b, placing outside the top-50 cryptocurrencies.
The obvious question is, has the price reached a level that makes CAKE an attractive medium-term play, or is more weakness likely?
The daily chart shows the PancakeSwap price is trading in a descending triangle formation. The pattern, defined by increasingly lower highs, is considered bearish. However, the lower edge of the triangle, at $9.25, has so far held up. Nonetheless, the trend is still down, potentially leading to another test of horizontal support.
On that basis, I expect PancakeSwap to continue lower in the near term, targeting $9.25. However, a close above the descending trend resistance at $15.60 invalidates the bearish view.
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This post was last modified on Dec 15, 2021, 05:27 GMT 05:27