PancakeSwap: Bullish rally rejected again at range-high, what next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Short-term holders of CAKE could benefit from the market’s bullish trend.
- MVRV ratio hinted at potential profit for holders.
The bullishness in the crypto market over the past 48 hours translated to 12.2% gains for PancakeSwap [CAKE]. This spurred the DEX (Decentralized Exchange) token to a range high of $1.62.
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However, the confluence of the bearish order block and resistance level limited the bullish advance. This led to a 4.5% dip, with CAKE trading at $1.57, as of press time. The price chart revealed bulls getting ready to make another advance for the critical resistance level. Will it be successful?
Bulls have found it hard to flip the $1.62 resistance level
A look southward on the higher timeframes showed CAKE’s bearish market structure, which has curtailed any significant bullish rally. Zooming into the four-hour timeframe showed CAKE achieving an all-time low of $1.30 on 12 June.
Despite the bearish structure, bulls rallied remarkably from an all-time low but met resistance at the $1.62 level. Buyers have found momentum hard to come by due to selling pressure at this level. This was evidenced in price rejections on 25 June, 3 July, and most recently 14 July.
With the confluence of a bearish order block and resistance level standing in the way of bulls, on-chart indicators offered a glimmer of hope in the short term.
While the most recent rejection saw the RSI (Relative Strength Index) dip to the neutral 50, the buying pressure kept it above the median mark with a reading of 58. The CMF (Chaikin Money Flow) also stood at +0.15 to highlight adequate capital inflows.
Bitcoin climbing to the $31k price zone could aid CAKE bulls in their quest to flip the resistance level. A break above the resistance will flip CAKE bullish on lower timeframes and could serve as a catalyst for a significant price reversal.
On the flip side, bears will be content to maintain the status quo with another dip to the range low, keeping CAKE stuck in its sideways price movement.
Rising holders’ count could spur buyers
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The on-chain metrics for CAKE could spur buying pressure in the short term. Data from Santiment showed that the total number of holders have been on the rise since late May. This could signal an influx of new holders hoping to ride the bullish wave from CAKE’s recent lows.
Similarly, the 30d MVRV (Market Value to Realized Value) ratio rose alongside the holder count. The negative reading of -2.73% hinted at an undervalued asset that could become profitable for short-term holders with a sustained bullish push.