Key points
- CAKE rose 4.5%, approaching the psychological $2.00 level.
- Derivatives data confirm the recovery as funding rates turn positive.
Derivatives data for CAKE support a bullish move
CAKE, the native token of the PancakeSwap exchange, gained 4.5% in the last 24 hours and is approaching the $2.00 mark.
The rally is supported by Coinglass OI-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 long CAKE than short. This metric turned positive on Wednesday and currently reads 0.0046%, indicating that long positions are paying shorts.
Additionally, Coinglass’s long-short ratio for CAKE stood at 1.11 on Thursday, nearing its highest level in a month. A ratio above one signals that more traders are positioned for a CAKE rally.
The bullish sentiment follows PancakeSwap’s announcement earlier this week that the community approved a proposal to reduce CAKE’s maximum supply.
Maximum supply was cut from 450 million to 400 million, and token burns have consistently outpaced new issuance.
CAKE could climb toward $2.10
The CAKE/USDT 4-hour chart remains structurally bearish despite CAKE’s 4.5% gain over the past day.
Price was rejected at the weekly resistance level of $2.13 on Saturday and fell about 10% earlier this week. However, it recovered on Wednesday and is now testing the $2.00 area again.
If CAKE continues its price recovery, it could climb toward the 50-period exponential moving average (EMA) on the 4-hour chart at $2.06, potentially testing resistance near $2.10.
The 4-hour Relative Strength Index (RSI) sits at 46 and is moving up toward the neutral 50 level, signaling waning bearish momentum. For the rally to prove sustainable, RSI needs to break above the neutral zone.
Conversely, a daily close below the $1.88 support level would likely extend the correction toward the next support area around $1.79.