PancakeSwap price analysis: a drop to $4 is possible
PancakeSwap could extend its decline in the near term
PancakeSwap’s price has rebounded off its strong support level as of 10 May 2022 as bulls try to prevent the resumption of the downtrend. PancakeSwap announced the launch of fixed-term and flexible staking on 25 April but investors do not seem to be enthused with the idea of locking their coins for the long term in the current bearish environment for cryptocurrencies.
Contents
- PancakeSwap price technical analysis: weekly chart
- PancakeSwap price technical analysis: daily chart
- PancakeSwap: buy or sell this week?
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Data from the Defi Llama shows that the total value locked for pancakeswap has been declining in the past few days. It has dipped from more than $5.2bn on 2 April to $4.24bn on 10 May.
Opera browser recently announced the integration of BNB Chain, previously known as Binance Smart Chain. This provides Opera's 339 million users, on Android, iOS, and desktop, access to various projects on the BNB Chain ecosystem, including decentralised exchanges such as pancakeswap.
BNB Chain, citing DappRadar data, tweeted that pancakeswap remained the “most used DApp in the world.”
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Could pancakeswap go up or will higher levels continue to attract selling by the bears? Read the CAKE price analysis to find out.
PancakeSwap price technical analysis: weekly chart
CAKE’s price has been in a downtrend for the past several weeks. The buyers attempted to push the price above the 20-week exponential moving average (EMA) but the bears were in no mood to let go of their advantage.
Repeated failure to clear the hurdle may have tempted short-term traders to book profits. That has pulled the price back toward the critical support at $5.28.
The downsloping 20-week EMA and the relative strength index (RSI) in negative territory suggest advantage to bears. If the price slips below $5.28, the CAKE/USD pair could start the next leg of the downtrend.
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Contrary to this assumption, if the rebound sustains, the buyers will make one more attempt to push the price above the 20-week EMA. If they succeed, it will suggest a potential change in trend.
PancakeSwap price technical analysis: daily chart
CAKE’s price had been trading inside a descending channel pattern for the past few days. Aggressive selling on 9 May pulled the price below the support line of the channel.
However, a minor positive is that the price rebounded from the strong support at $5.28 and the bulls are attempting to push the pair back inside the channel. If they manage to do that, it will suggest that the markets have rejected the breakdown.
The pair could then rise to the 20-day EMA and thereafter to the 50-day simple moving average (SMA). A break and close above the resistance line of the channel could signal that bulls have made a comeback.
Contrary to this assumption, if bulls fail to push the price back into the channel, it will suggest that the support line has flipped into resistance. The bears will then try to sink the pair below $5.28. If they succeed, the pair could start the next leg of the downtrend. The next target objective on the downside is $4.
PancakeSwap: buy or sell this week?
The bulls are attempting a recovery but are likely to face stiff resistance at higher levels. If the price turns down from the overhead resistance, the possibility of a break below $5.28 increases. That could pull the pair down to $4. Conversely, pancakeswap’s price analysis suggests that if bulls push the pair back inside the channel, the recovery could reach the 50-day SMA.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.
