PancakeSwap futures on Arbitrum hit $1 billion trade volume, fails to catalyze CAKE price recovery
- PancakeSwap V2 futures trading on Arbitrum hit a milestone of $1 billion in total trading volume.
- The decentralized exchange announced a $25 million CAKE token burn that took place on Monday.
- CAKE price failed to recover despite bullish developments in the DEX’s ecosystem.
PancakeSwap (CAKE), the token of a decentralized exchange platform, failed to recover from its slump despite the recent developments in the project’s ecosystem. The DEXes futures trading on Arbitrum hit a key milestone alongside a massive token burn by the exchange platform.
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PancakeSwap announces new milestones and developments
According to an official tweet from PancakeSwap’s X (formerly Twitter) account, the DEX launched perpetuals trading, a derivative contract that allows speculation on the price of assets without an expiration date, on Arbitrum in 2023.
The DEX noted a record $1 billion in total trading volume on Arbitrum. This points to the demand for perpetuals trading among users in the Arbitrum ecosystem and supports the theory of increasing relevance of PancakeSwap among market participants.
Another key development is CAKE token burn by the exchange. The exchange revealed that $25 million worth of tokens (8,740,957 CAKE) was burned on Monday. Typically, a token burn reduces the circulating supply of an asset, easing selling pressure and supporting price recovery.
8,740,957 $CAKE just burned - that’s $25M!
— PancakeSwapEveryone's Favorite DEX (@PancakeSwap) January 8, 2024
Trading fees (AMM V2): 124k CAKE ($350k) +0%
Trading fees (AMM V3): 93k CAKE ($262k) -27%
Trading fees (Non-AMM like Perpetual, Position manager etc): 9.5k CAKE ($27k) +2622%
Prediction: 34k CAKE ($96k) -3%
️ Lottery:… pic.twitter.com/dByHgCHnKp
In the case of CAKE, the token burn is yet to catalyze a price recovery for the decentralized exchange’s asset.
At the time of writing, CAKE price is $2.867 on Binance. The DEX token price declined by nearly 18% in the past week. CAKE price could find support at its 50-day and 200-day Exponential Moving Averages (EMAs) at $2.702 and $2.172, respectively. CAKE price faces resistance at the 10-day EMA at $3.079.
CAKE/USDT 1-day chart
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
