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PancakeSwap sees whale interest, but the price pump should not fool investors

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PancakeSwap: Whale interest increase, but investors should be cautious 
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  • PancakeSwap remained popular among the whales.
  • However, the metrics and market indicators gave an ambiguous picture. 

PancakeSwap [CAKE] has remained pretty consistent with its burn process, which reflected the token’s deflationary characteristic. The network recently revealed that it burned CAKE worth over $27 million. 

Not only that, but CAKE was also one of the top choices of the whales. WhaleStats, a popular Twitter handle that posts updates regarding whale activity, pointed out that CAKE was on the list of the tokens that the top 100 BSC whales were holding. This was good news, as it proved whales’ confidence in CAKE. 

Realistic or not, here’s CAKE market cap in BTC’s terms

The CAKE is baking, but this is the catch!

While CAKE garnered whales’ interest, its performance on the price front was optimistic too, as it registered double digit weekly gains. CoinMarketCap’s data revealed that CAKE’s price increased by over 7% in the last 24 hours, and at the time of writing, it was trading at $4.15 with a market capitalization of more than $683 million.

Though the price action was in the investors’ favor, CryptoQuant’s data revealed that CAKE’s Relative Strength Index (RSI) was in an overbought position.

Moreover, while CAKE’s price increased, its volume increased simultaneously, which legitimized the surge. However, the MVRV ratio increased substantially over the last few days, pointing out a market top. Daily active addresses registered a decline, suggesting a lower number of users in the network.

Positive sentiments around CAKE also went down, reflecting less faith of the investors in CAKE. Interestingly, though the positive sentiments declined, CAKE made it to the list of the top 10 BNB Chain projects by social activity. 

Source: Santiment

Read PancakeSwap’s [CAKE] Price Prediction 2023-24

Caution is advised 

CAKE’s daily chart showed that there were possibilities of a continued surge, but things might as well choose to follow the opposite trend. For example, the MACD’s readings were bullish, as was the Exponential Moving Average (EMA) Ribbon, which displayed a bullish crossover.

However, the Money Flow Index (MFI) entered the overbought zone, which could indicate selling pressure in the coming days.

Source: TradingView

 

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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