PancakeSwap bulls defend $1.5 support: Is a move to $3 next?
The short-term sentiment behind CAKE appeared bullish- could this lead to increased bidding and a move beyond $2.16 next?
- PancakeSwap showed short-term bullish sentiment after rallying nearly 22%.
- Increased buying volume was necessary to drive the price to the range high just below $3.
PancakeSwap [CAKE] has rallied 34% in five days after reaching the low of $1.38 on the 11th of March. During the same period, Bitcoin [BTC] was up 9.3% from $76.6k to $83.7k.
While the rally of CAKE appeared impressive, it’s unclear whether it can surge higher.
Technical analysis showed that the bulls have a chance to drive prices higher. Demand needs to strengthen, and a BTC move beyond $84.3k would help the altcoins and PancakeSwap rally higher.
The challenges for PancakeSwap, and the progress thus far
The weekly chart showed that the $1.51 level (dotted orange) was a key support level. During the price drops in February and March, CAKE bulls have defended this demand zone. This was an encouraging sight.
The OBV also climbed higher in recent days, outlining some buying volume, but not as strong as the early February bounce.
The daily chart showed a range formation (purple) between $1.37 and $2.94. The recent gains saw CAKE move beyond the 75% level of the range at $1.76, and it should serve as a support upon retest.
At the same time, the token was trading within a fair value gap (white box) and could face some selling pressure in the coming hours.
The RSI was just below neutral 50, a sign that a bullish momentum shift was on the verge of happening.
Swing traders can use a retest of the $1.68-$1.79 region to buy more CAKE, with the take-profit levels at the mid-range and range high at $2.16 and $2.94 respectively.
Coinalyze data showed increasing Open Interest behind PancakeSwap in the past three days. The inference was that derivatives traders were confident of going long.
During this time, the spot CVD also climbed higher, although it saw a decline in the past few hours.
Overall, the short-term sentiment behind CAKE appeared bullish. This could see the price retest the $1.7 area as support and climb higher.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
