disclaimer: The following analysis results are the sole opinions of the authors and should not be construed as investment advice.
Despite the drama from the previous day, PancakeSwap’s token CAKE showed a bullish outlook at the end of March. The rejection in the $11 area left a sour taste in the mouths of long-term investors in CAKE.
At the time of this writing, the token was rebounding significantly from support levels after Bitcoin rebounded from the $30,000 mark.
Cake – 12 Hour Chart
Almost exactly a year ago, in early May 2021, CAKE was trading at $42 and investors watched the $50 level with excitement. The price did not cross $44.2 and the token dropped to $10. At the end of August, CAKE traded hands at $29, but the bulls could no longer lead the rally and the long-term downtrend was once again confirmed.
The bull market took the lead again in mid-March and CAKE rose to $10.9 from $5.44 in April. $10.9-$11.2 is an important area of resistance for the bear to touch.
Over the past six weeks, the $7.5-$8 area has been very important as CAKE has made strong moves after overturning this area. In its current state, this area is the realm of supply. Moreover, the Fibonacci retracement level shows this area consolidating with the 38.2% retracement level of $7.51. Therefore, the $6.7-$7 area and the $7.5 area are likely to act as bearish bastions over the next or two weeks.
The RSI fell below its neutral 50 in April before falling to 22.2 the day before. At the time of writing, CAKE appears to have rebounded from the $5.58 support and may revisit $6.7 and $7.5. The Awesome Oscillator also remained below the zero line, demonstrating strong bearish momentum.
OBV, on the other hand, showed a decline in April and May, but made an impressive rise in the March rally. So while the seller has the upper hand, there is a dim possibility that this could change if the bulls get their $7.5 back.
The market structure decisively weakened as the price fell below $7.5, and depending on the trend, you should look for a sell or sell opportunity for the crypto asset. A move above $7.5-$8 may change this bias, but we cannot ignore the bull trap as market sentiment is still fearful.