PancakeSwap [CAKE] enjoyed a bullish performance in recent days. It noted a 13% rally over the past week, and was up 8.2% in 24 hours.
These gains came after a month-long consolidation around the $1.2-$1.3 area.
CAKE had been trading within a range for most of the past 15 months. At the time of writing, it had managed to work its way back within the range.
Can the bulls keep the run going?
Dissecting the long-term downtrend
The $1.5 horizontal level has been an important support/resistance since July 2023. In fact, the price action of the past year showed that CAKE bulls were weak.
Moreover, for more than half a year, when Bitcoin [BTC] was making new all-time highs and comfortably above the $100k mark, CAKE struggled to breach the $3 resistance.
Even when it did, its breakout was curtailed at the $4.2-$4.6 supply zone that has been in place since May 2022.
In other words, holders were eager to take profits, and there was not enough demand to keep the move going.
Swing traders and investors buying CAKE at “value areas” such as $1.3 should remember this threat from profit-taking activity when prices approach key long-term resistances. The closest one was the mid-range level at $2.16.
This was the swing point on the 3-day chart that needs to be broken to flip the PancakeSwap token trend bullishly on the higher timeframes.
The strong short-term bullishness for CAKE
In the past 24 hours, Open Interest behind CAKE perpetual contracts has increased by 28%.
Speculators were eager to trade on the strong momentum of the altcoin. The rising Spot CVD indicated firm spot market demand and hinted at a sustainable short-term move.
The $1.5 and $1.6 levels were the key nearby resistance levels to overcome. The former has been breached, and the latter was the next short-term target.
A retracement toward $1.40-$1.45 over the next week or two can be used to buy PancakeSwap tokens. The short-term trend was bullish, and traders should keep an eye on Bitcoin trends to navigate the altcoin trends.
Traders already in long positions can take profits in the $1.5-$1.6 region and wait for the market to hint at its next move.
Final Summary
- PancakeSwap was in a long-term downtrend, but its recovery from $1.3 to $1.5 showed strong short-term bullish momentum.
- A retracement from $1.6 is possible in the coming days, and Bitcoin price trends would influence PancakeSwap’s moves.
