Key takeaways
- CAKE is up 4.5% and is approaching the $2 psychological level.
- Derivatives data support the recovery as funding rates have turned positive.
Derivatives data point to bullish momentum for CAKE
CAKE, the native token of the PancakeSwap exchange, gained 4.5% in the last 24 hours and is now closing in on the $2.00 mark.
The recent rally is backed by derivatives indicators from Coinglass, which show that fewer traders are positioning for a price drop compared with those expecting an increase.
A positive funding rate means longs are paying shorts, reflecting a bullish tilt among traders. The funding rate flipped positive on Wednesday and currently reads 0.0046%.
Coinglass’s long-to-short ratio for CAKE stood at 1.11 on Thursday, approaching the highest reading observed in over a month. A ratio above 1 indicates a larger share of long positions, which supports the upside bias.
This optimistic sentiment follows PancakeSwap’s announcement earlier in the week that the community approved a proposal to reduce CAKE’s maximum supply.
The token’s maximum supply was lowered from 450 million to 400 million, and on-chain burns have been exceeding emissions, further supporting scarcity dynamics.
CAKE could target $2.10 if recovery holds
Despite the recent gains, the CAKE/USDT 4-hour chart remains structurally bearish but has shown a measured recovery after the drop earlier this week.
Price was rejected at the weekly resistance near $2.13 on Saturday and fell about 10% earlier in the week. It bounced on Wednesday and is once again approaching the $2.00 area.
If the recovery continues, CAKE could push toward the 50-day exponential moving average (EMA) near $2.06 and test resistance around $2.10–$2.13.
The 4-hour Relative Strength Index (RSI) sits at 46 and is moving upward toward the neutral 50 level, suggesting that bearish momentum is fading. For a sustained rally, the RSI needs to break above neutral territory.
Conversely, a daily close below the $1.88 support level would raise the likelihood of a deeper correction, potentially driving price back toward the $1.79 support zone.