PancakeSwap jumps 10% after holding $1.3 – Can CAKE bulls clear $1.6?

After a period of prolonged weakness, PancakeSwap successfully held $1.3 and jumped to a local high of $1.56 before retracing slightly. 

As of this writing, PancakeSwap traded at $1.52, up 10.2% on the daily charts. Over the same period, the altcoin’s trading volume jumped 182% to $88 million, reflecting increased market participation. 

With the price uptick, CAKE flipped 20.50 and the 100-day EMA, showing strong upward momentum.

PancakeSwap records renewed market demand.

After PancakeSwap [CAKE] signaled a rebound, traders rushed into the market to reposition, thereby strengthening demand.

CoinGlass data showed that CAKE’s Open Interest jumped 40% to $31 million while the derivatives volume climbed 124% to $59 million. 

With OI and Volume rising together, this signaled strong market participation and capital flow, with traders opening new positions. 

In fact, traders across all exchanges seem to have chased the market rally. As such, Long Short Ratio jumped 1.01, with Binance Top Traders leading with 1.7. 

Such a market positioning suggests that traders were mostly bullish and took long positions, anticipating more gains.

On the spot side, investors also turned overly optimistic and turned aggressive in their accumulation. As such, the market recorded $5.81 million in spot outflows compared to $5.26 million in inflows.

For that reason, the Spot Netflow dropped 790% to -$547k. A negative Netflow suggested that buyers were stronger than sellers on exchanges.

Traditionally, higher demand on the spot and futures sides has strengthened an asset’s upward momentum, leading to further gains.

Can the upside momentum hold?

CAKE saw strong upside momentum as demand returned in the market. In fact, the altcoin’s Relative Strength Index (RSI) made a bullish crossover and rose to 57.

With RSI edging into the bullish zone, it suggested that buyers outpaced sellers and took control of the market. Often, when RSI reaches these levels after spending time in the bearish zone, it signals the likelihood of trend continuation.

Therefore, if buyers can hold onto the market, CAKE could make more gains on its price charts. Another upside move will see CAKE flip $1.6 and eye long-term resistance at $1.7.

However, for this bullish outlook to hold, CAKE must close above $5. Failure to do so will create another room for a panic exit, causing a drop.

In such market conditions, a pullback will see CAKE fall below the 20-day EMA and drop to $1.3.

Final Summary

• PancakeSwap [CAKE] jumped 10%, after successfully holding $1.3, flipping 100-day EMA to a local high of $1.56. 
• CAKE must close above $1.5 to maintain the bullish outlook, or risk dropping back to the $1.3 support again.