After a prolonged period of weakness, PancakeSwap managed to hold $1.3 and surged to a local high of $1.56 before retracing slightly.
At the time of writing, PancakeSwap was trading at $1.52, up 10.2% on the daily charts. During the same period, the altcoin’s trading volume jumped 182% to $88 million, reflecting increased market participation.
With the price rally, CAKE reversed 20.50 and the 100-day EMA, showing strong upside momentum.
PancakeSwap is seeing renewed market demand.
After PancakeSwap (CAKE) reported a rebound, traders rushed into the market to reposition, strengthening demand.
Data from CoinGlass showed that CAKE’s open interest jumped 40% to $31 million, while derivatives volume soared 124% to $59 million.
The simultaneous increase in OI and volume indicates strong market participation and significant capital flow as traders open new positions.
In fact, traders across all exchanges appear to have continued the market rally. Thus, the Long Short ratio jumped by 1.01, with Binance Top Traders leading with 1.7.
Such market positioning suggests that traders were mostly optimistic and took long positions, anticipating more gains.
In the spot market, investors have also become overly optimistic and aggressive in their accumulation. Thus, the market recorded $5.81 million in cash outflows, compared to $5.26 million in inflows.
Due to this, Spot Netflow dropped 790% to -$547,000. Negative Netflow suggests that buyers were stronger than sellers on the exchanges.
Traditionally, higher demand for spot and futures has reinforced an asset’s bullish momentum, leading to further gains.
Can the upward momentum continue?
CAKE experienced strong upward momentum with the return of demand to the market. In fact, the altcoin’s Relative Strength Index (RSI) made a bullish crossover and rose to 57.
With the RSI entering the bullish zone, this suggests that buyers have outpaced sellers and taken control of the market. Often, when the RSI reaches these levels after spending time in the bearish zone, it signals the likelihood of a continuation of the trend.
Therefore, if buyers manage to hold the market, CAKE could make more gains on its price charts. Another upward move will see CAKE reverse $1.6 and observe 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 fall.
In such market conditions, a pullback will see CAKE fall below the 20-day EMA and drop to $1.3.
Final summary
- PancakeSwap (CAKE) surged 10%, after managing to hold $1.3, pushing the 100-day EMA to a local high of $1.56.
- CAKE must close above $1.5 to maintain the bullish outlook, otherwise it risks falling back to $1.3 support.
