- Pancake Swap’s native token CAKE, witnessed a spike in its social dominance early on Monday.
- The $10.4 million token burn announced by Pancake Swap is expected to act as a bullish catalyst for the DEX’s native token.
- Total value of assets locked in Pancake Swap has been on a consistent decline, alongside the decreasing CAKE price.
Pancake Swap, one of the largest DEXes in the crypto ecosystem, announced the burn of $10.4 million worth of CAKE tokens. While a token burn is typically considered bullish for the asset, in the case of CAKE, reducing its circulating supply is unlikely to catalyze a token's price recovery.
Key on-chain metrics, like total value of assets locked on Pancake Swap and staking of CAKE token, have both decreased considerably throughout the year. CAKE price has nosedived alongside these developments since the beginning of February 2023.
Also read: Arbitrum price declines as institutional investors shed ARB holdings
Pancake Swap awaits bullish catalysts to begin price recovery
Pancake Swap’s native token CAKE suffered a decline last week. Over the past 24 hours, CAKE price declined nearly 3% on Binance. The DEX announced a $10.4 million token burn in a recent tweet:
8,222,066 $CAKE just burned - that’s $11M!
— PancakeSwapEveryone's Favorite D3X (@PancakeSwap) August 21, 2023
Trading fees (V2 and Perpetual): 108k CAKE ($141k) +103%
Trading fees (V3): 37k CAKE ($48k) -7%
Prediction: 66k CAKE ($86k) -19%
️ Lottery: 36k CAKE ($47k) +27%
NFT Market, Profile & Factory: .7k CAKE ($1k) -3%
*%… pic.twitter.com/Wg7jBDwa7j
Token burns typically fuel asset prices, however there are other factors that are likely to contribute to CAKE’s price drop. Based on data from crypto intelligence tracker, DeFiLlama, there is a consistent decline in the total value of assets locked on Pancake Swap throughout 2023.
TVL, Staking on Pancake Swap
The volume of CAKE tokens staked has fallen alongside the total value of assets locked in Pancake Swap.
CAKE’s social dominance climbed on August 21, as seen in the Santiment chart below. The social dominance of the DEX token hit its highest level in 2023. This is an on-chain metric that reveals the relevance of the token among crypto holders.
 [18.39.02, 21 Aug, 2023]-638282222193255612.png)
Pancake Swap Social dominance vs price
It remains to be seen whether the token burn and the rising social dominance can fuel a recovery in CAKE price.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin price could retrace to $42,000 if US Nonfarm Payroll comes in at 180,000
Bitcoin price just like other assets, is highly impacted by the macro-financial developments. This includes the Nonfarm Payrolls (NFP) report released by the BLS of the United States. This time around, the NFP data is expected to cause a dip in the value of BTC.
Ripple is now only 3% away from becoming a bigger entity than Binance Coin
Ripple has overcome a lot of obstacles on its way to becoming the world’s fifth-largest cryptocurrency, as witnessed by the recent rise in XRP price. The native token of the world’s biggest crypto exchange, Binance Coin, on the other hand, has been moving in the opposite direction.
Ethereum leads altcoins north as Bitcoin halts amid bull trap fears
Ethereum (ETH) price remains northbound, unrelenting despite the king of cryptocurrency, Bitcoin, showing weakness. Behavior analytics tool Santiment observes that Ether and altcoins are on a tear even as BTC momentum fades.
BTC headstrong as Spot ETF talks reach technical stage
Bitcoin remains steadfast on the higher timeframe, amid news that spot BTC exchange-traded funds (ETF) discussions are now at the technical stage of approval. Specifically, talks with Spot BTC ETF issuers have advanced to key technical details, with Reuters indicating that it could signal a shift toward a potential approval.
Bitcoin Weekly Forecast: BTC uptrend capped by supply barrier at $43,860 as FOMO fails to suffice
Bitcoin (BTC) price uptrend has sustained since mid-September on the weekly timeframe but has since slowed down following the lack of tailwinds to drive the market. All along, narratives, themes and speculation were the driving factors, inspiring a wave of fear of missing out (FOMO) in the market. As it turns out, FOMO is not enough anymore.