Key points
- CAKE has risen 4.5%, approaching the psychological $2 level.
- Derivatives data support the recovery as funding rates turn positive.
Derivatives data for CAKE support bullish moves
CAKE, the native token of the PancakeSwap exchange, has gained 4.5% over the past 24 hours and is now trading close to $2.00.
The rally coincides with Coinglass’ open interest-weighted funding rate data, which show fewer traders betting on further CAKE price declines than those expecting gains.
A positive funding rate means more traders are bullish on CAKE than bearish. The metric turned positive on Wednesday and is currently at 0.0046%, indicating longs are paying shorts.
Coinglass also reported a long-to-short ratio for CAKE of 1.11 on Thursday, near a one-month high. A ratio above one signals that more traders are speculating on upward price movement for CAKE.
This optimistic outlook follows PancakeSwap’s announcement earlier in the week that the community approved a proposal to reduce CAKE’s maximum supply.
Maximum supply has been lowered from 450 million to 400 million, and burns have consistently outpaced emissions.
CAKE could push toward $2.10
The CAKE/USDT 4-hour chart remains technically bearish, despite the recent 4.5% gain over the last day.
CAKE’s price was rejected at the weekly resistance level of $2.13 on Saturday and fell about 10% earlier in the week. It recovered on Wednesday and is now approaching the $2.00 mark again.
If CAKE maintains its recovery, it could aim for the 50-day exponential moving average (EMA) near $2.06.
The 4-hour Relative Strength Index (RSI) sits at 46 and is trending up toward the neutral 50 level, suggesting bearish momentum is waning. For the rally to hold, RSI needs to climb above the neutral mark.
Conversely, a daily close below support at $1.88 could extend the correction toward the support zone around $1.79.