Key Takeaways
- CAKE rose 4.5%, approaching the psychological $2 mark.
- Derivatives data support the recovery as funding rates have turned positive.
CAKE derivatives data support a bullish move
CAKE, the native token of PancakeSwap, gained 4.5% in the last 24 hours and is now trading near $2.00.
This rally coincides with Coinglass data on the OI-weighted funding rate, which indicate that fewer traders are betting on further price declines for CAKE compared with those expecting upside momentum.
A positive funding rate means long positions are dominant over shorts. The rate turned positive on Wednesday and currently stands at 0.0046%, suggesting longs are paying short traders.
Additionally, Coinglass’s long-to-short ratio for CAKE reached 1.11 on Thursday, approaching a one-month high. A ratio above one signals increasing trader optimism and a growing bias toward long positions.
This bullish shift followed PancakeSwap’s announcement earlier in the week that the community approved a proposal to reduce CAKE’s maximum supply.
The maximum supply was cut from 450 million to 400 million, and token burns are continuing to outpace new emissions.
CAKE could climb to $2.10
On the 4-hour chart, CAKE/USDT remains technically bearish overall, despite the 4.5% gain in the past day.
CAKE was rejected at the weekly resistance near $2.13 on Saturday and fell about 10% earlier this week. It staged a recovery on Wednesday and is now testing the $2.00 area again.
If the recovery continues, CAKE could move up toward the 50-period exponential moving average (EMA) around $2.06 and potentially reach $2.10 if momentum strengthens.
The 4-hour Relative Strength Index (RSI) sits at 46, pointing toward the neutral 50 level and indicating weakening bearish momentum. For sustained upside, the RSI needs to climb above neutral territory.
Conversely, a daily close below support at $1.88 would likely extend the correction toward the next support zone near $1.79.