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Here’s the case for CAKE sustaining its uptrend after 53% hike
Despite a 53% surge in the market, CAKE could experience a brief cooldown before further rallying. The on-chain data suggests that this trend may continue.
PancakeSwap’s native token has seen an impressive rally over the past 24 hours, gaining 100% on a weekly basis. This upward momentum is driven by key metrics like TVL and fees generated on its protocol. However, analysts at AMBCrypto suggest that a correction before further price growth could occur.
A brief cooldown before continued rally
CAKE’s recent chart movement has seen it clear major resistance levels of 2.414 and 2.816, as indicated by the Fibonacci Retracement Line. Although it failed to break above the 3.217 resistance zone, this rejection may have led to a price correction in its current state.
The Relative Strength Index (RSI) now sits at an overbought level of 75.24. This suggests that the asset is potentially due for a correction. Using the Fibonacci line, potential drop levels at 2.816 and 2.414 could be reached. These support levels may add momentum to a price rebound from its current value.
Bullish sentiment remains intact
Despite the recent correction, PancakeSwap’s TVL has surged by 15.91% in the last 24 hours and now holds at $1.857 billion, establishing a new high for February. This growth could extend beyond $2.003 billion, the highest point reached this year.
The rise of fees generated on PancakeSwap also contributes to the overall bullish sentiment. It has generated an unprecedented $50.04 million in fees over the last week and an additional $8.43 million in the past 24 hours, according to DeFiLlama data. This significant growth in demand could fuel CAKE’s rally.
CZ support for memecoins may have fueled momentum
Changpeng Zhao, founder of Binance Smart Chain, where PancakeSwap is native, recently expressed interest in creating a new memecoin for his dog. This announcement could have contributed to the recent surge as traders may be positioning themselves for potential opportunities in memecoins.
Furthermore, CZ’s statement about possibly engaging with certain memes on BNB Chain further underscores CAKE’s potential upside. As the founder is likely to facilitate trading of these tokens, it would make sense that PancakeSwap’s native token could also rally alongside these new assets.
In conclusion, despite a correction before further growth being possible, the fundamental data points toward an upward trend for CAKE.
Source: ambcrypto.com
