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The strong buying pressure on CAKE was evidenced by its consecutive bullish candles on the daily timeframe. This saw the altcoin flip the critical $3.5 resistance to support. Earlier in January, CAKE’s bullish run had faltered at the $3.5 resistance, leading to a 35% retracement.
However, the bullish sentiment in the market spurred by Bitcoin approaching a new all time high has translated to another uptrend for altcoins, CAKE inclusive.
PancakeSwap: The Low Fees 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) with CAKE serving as a utility token that incentivizes liquidity provision on the DeFi platform.
With the influx of retail investors into another bull market, demand has started to rise for CAKE. This is due to low-cap investors looking to avoid the exorbitant gas fees of Ethereum flocking to low-fee chains such as Binance Chain.
PancakeSwap is currently recognized as the biggest DEX on Binance Chain with its daily trading volume currently over $100 million. This makes it the perfect DEX for retail investors, translating into key demand for CAKE.
Long Opportunity Can Yield 40% Gains
Analyzing the capital inflows to CAKE on the daily timeframe showed that it reached its highest inflow in 2024 with a reading of 0.25. Likewise the Relative Strength Index (RSI) highlighted the buying pressure, as it inched toward the overbought zone.
Taken together, it revealed the dominance of buyers on the CAKE price chart. With the break of the key price resistance at $3.5, buyers can leverage this for new buy opportunities.
A retest of the new support at $3.5 on the daily timeframe with a strong bullish candle would serve as an entry signal. This could yield a potential short term profit target of $4 for 15% gains and long term profit target of $5 for 40% gains.
Alternatively, if price fails to close above the new support, CAKE could range between the $3 - $3.5 price level with the possibility of a retracement before another bullish pump.
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.
