warning: The results of the following analysis are the author’s opinions only and should not be considered investment advice
- PancakeSwap has been trading in a range for the past two weeks
- There was no strong demand for the token, so a wave of selling could cause the token to drop sharply
Pie [CAKE] It has experienced less volatility over the past two weeks. The $3.96 level has been crucial recently and has acted as resistance at the time of writing. A buying or selling opportunity may appear at a move to $3.84 and $4.12, respectively.
Read PancakeSwap’s [CAKE] Price forecast 2023-2024
Bitcoin faced resistance in the $17.3K area, and the cryptocurrency market has seen a neutral momentum over the past few days. If PancakeSwap sees an increase in the price of the token, it is more likely to offer a selling opportunity than a single buying opportunity.
Both the VPVR and the mid-range showed $3.96 to be an important level for the bulls to win
On the hourly chart, CAKE has formed a range (yellow) from $3.84 to $4.12 since November 23. The midpoint of this range was $3.98. The Volume Profile Visible Range tool also showed the Control Point (POV, red) at $3.96. This level was close to the average value.
Therefore, we can conclude that, especially on the lower timeframes, $3.96 was the level to beat for the bulls. A retest of this level can be bought as support, targeting $4.12 as a take profit. However, the Accumulation/Distribution (A/D) index has been steadily declining during the time CAKE has been trading in the aforementioned range. The Relative Strength Index (RSI) was also near neutral 50 showing lack of strong momentum.
This showed that demand was weak. $3.75 – $3.84 has been an important area on higher time frame charts like the 12-hour. Until we see a clear breakout, traders can look at the extremes of the range for good R:R trading opportunities.
MVRV is moderately climbing into positive territory but the sentiment is not yet bullish
The sentiment weighted on the above chart showed tepid enthusiasm for cake at best. Social Dominance has seen sharp rises in recent weeks. However, there has been no significant correlation between upward price action and positive sentiment since October.
Meanwhile, the 30-day market value-to-realized ratio (MVRV) has increased since November 21, crossing 0% recently. This may indicate that short term holders may consider profit taking on a bullish rally. This idea resonates with the scope introduced earlier.