• PancakeSwap price released from a minor inverse head-and-shoulders pattern earlier today.
  • CAKE 50 four-hour simple moving average (SMA) has been involved in the price action since May 25.
  • Current bottoming process is similar to other cryptocurrencies, indicating no relative strength.

PancakeSwap price action in the short-term was clarified with a breakout from a minor head-and-shoulders pattern, but the bigger picture remains clouded. For now, investors are better served with a patient posture, pursuing concise tactical opportunities such as today and allowing CAKE to determine the point of least resistance for the next major trend.

PancakeSwap price predictions tempered after 80% plunge

CAKE is the native token of the PancakeSwap DeFi project built on the Binance blockchain due to the better fee structure and quicker transaction speeds than the Ethereum blockchain.

PancakeSwap price rallied almost 380% from March 15 into the April 30 high due to developers shifting to Binance’s platform and the explosive growth in the popularity of DeFi services. Moreover, the surge in altcoins over that period spread to the DeFi-linked token. 

The frenetic rally in March and April quickly dissolved into an 80% decline that erased the gain from March 15 and included a weekly decline of 56%. It was one of the largest weekly declines within altcoins.

PancakeSwap price continues to recover from May’s 80% correction while oscillating a long the 50 four-hour SMA. Today’s breakout from a minor inverse head-and-shoulders pattern does not materially alter the mixed outlook for the digital asset. CAKE relative strength is suffocated by the broader market gyrations, putting it in the same predicament as most cryptocurrencies.

Moving forward, the measured move target of the inverse head-and-shoulders pattern is $19.82, representing a tactically significant 21% gain for CAKE from the neckline. If the target is reached, PancakeSwap price would be very close to the May 26 high at $20.09 and in an area of price congestion from May 21 and 22. It would require a notable surge in buying pressure to overcome the PancakeSwap price resistance that has been absent for most of the last six days. 

A return of interest in the crypto market, combined with a Bitcoin breakout from the symmetrical pattern, could lift PancakeSwap price to the 38.2% Fibonacci retracement of the May correction at $22.67.

CAKE/USD 4-hour chart

CAKE/USDPERP 4-hour chart

Outside of the 50 four-hour SMA at $16.63, CAKE has no support until the right shoulder low at $14.85. More engaging support is at $13.50, a level defined by the May 19 low at $13.50 and the May 21 low at $13.48. Further support may not materialize until the May 23 low at $9.29, yielding close to a 50% decline from the current price.

The DeFi craze catapulted several altcoins into new highs with historic gains. Still, the collective collapse of all tokens in May discarded the idea that the prosperous fundamental story of any one cryptocurrency could outrun a widespread sell-off. Despite the promising outlook, CAKE remains a high-risk investment that will always be liquidated first in moments of financial market dislocation.

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.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Crypto bulls unfazed by flash crash

Bitcoin price action initially shakes off strong selling pressure, finds buyers at support, then resumes some selling pressure. Ethereum price action mixed post-all-time high rejection. XRP price awaits its own bullish breakout and an opportunity to outperform its peers.

More Cryptocurrencies News

MATIC price ready for new all-time highs as $188 million flow into Polygon

The total number of transactions on Polygon network dropped nearly 15% due to a rise in transaction fees over the past week. This hasn’t negatively impacted the network as the number of unique daily active users remained stable. 

More MATIC News

AVAX price offers a bullish opportunity before Avalanche hits new all-time highs

Avalanche (AVAX) price has seen a bullish outbreak on Thursday after it broke out above – and then retested – the red descending trend line at $61.62. With even more buyers and bulls coming in, expect a run towards new all-time highs at $81.

More AVAX News

XLM price building base for bullish breakout

Stellar bulls are in the last phase of completing a bullish triangle. As XLM price is getting squeezed against the base ($0.40), expect a quick breakout of 12%. After taking a breather, expect another 10% of profits to follow. 

More Stellar News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast