- CAKE’s price exhibits strong upward momentum, supported by rising lows observed on April 7, May 5, and May 19.
- Derivatives data highlights growing bullish sentiment, with open interest in CAKE rising by 80.13% to $90.53 million in 24 hours.
PancakeSwap’s CAKE token gained over 16% and rose to $2.91 on Tuesday, May 27, which is its highest level in three months. Thanks to the recent adoption of PancakeSwap’s revamped Tokenomics 3.0, investors are reconsidering the coin and rebuying it.
CAKE Price Surges Amid Token Burn Initiative
At the same time, CAKE and veCAKE tokens that have been locked are becoming available again. Still, despite investors fearing that unlocking more tokens could increase selling, the new tokenomics lowers the supply and permanently removes some tokens from circulation. Moreover, new figures from PancakeSwap indicate that the platform’s trading volume has risen to $106 billion.
Tokenomics 3.0 was first presented on April 8, with implementation starting on April 23. From this point on, ReddCoin moved away from the veCAKE model, stopped using gauge voting, and began reducing the amount of tokens being created. The daily emissions level dropped from 29,000 CAKE to 20,000 CAKE in the first stage. Ecosystem growth fund allocations were brought down by 50%, to 3,250 CAKE dail,y and the extra CAKE was used in burn activities.
This week marks the beginning of phase two, which further decreases daily emissions to 14,500 CAKE. As a result, the total supply of CAKE will be reduced by 5.3 million tokens every year. In recent development, PancakeSwap Infinity launched “Hooks,” enabling custom logic and dynamic real-time swap fee adjustments within liquidity pools, as mentioned in our previous article.
PancakeSwap Price Analysis Amid Latest Rally
The CAKE price is looking strong based on the charts. We have noticed three lows on the token that are rising, observed on April 7, May 5, and May 19. The highest point in this design falls at the $2.77 resistance level, which has controlled upward movements in price since January.
There is renewed upward momentum showing up on the daily chart, as indicated by the most recent candlestick. The 50-day and 200-day Exponential Moving Averages (EMAs) are on the verge of a golden cross, which is a positive signal.
The Moving Average Convergence/Divergence (MACD) indicator has projected a bullish crossover. Meanwhile, the Relative Strength Index (RSI) for CAKE is now at 67, which comes close to the overbought territory. The RSI has remained below 70 since February, a threshold that could reinforce a breakout if surpassed.
At press time, the PancakeSwap token price stood at $2.83, up by 14.47%. Whilst the $2.77 price level represents the 50% Fibonacci retracement between the high on December 8 at $4.185 and the low on February 7 at $1.354.
Hence, if the token sustains the recent breakout from $2.77, it could successfully lead CAKE to venture near $3.57, matching the 78.6% Fibonacci resistance level. However, a rejection may retest the $2.183 level, which is around the 200-day EMA.
Amid the recent rally, derivatives markets reflect growing bullish sentiment. According to Coinglass stats, open interest in CAKE increased by 80.13% over the past 24 hours, landing at $90.53 million. Meanwhile, short liquidations amounted to $411,990 as bearish traders tried mitigating losses by covering up positions.
