Key takeaways
- CAKE is up 4.5%, approaching the $2 psychological level.
- The derivatives data back the recovery as funding rates turn positive.
CAKE’S derivatives data support bullish movement
CAKE, the native coin of the Pancakeswap exchange, has added 4.5% to its value in the last 24 hours and is now approaching $2.0.
The rally comes as Coinglass’s OI-Weighted Funding Rate data shows that the number of traders betting that the price of CAKE will slide further is lower than that anticipating a price increase.
The positive funding rate means that more traders are bullish on CAKE than bearish. The metric flipped positive on Wednesday and currently reads 0.0046%, indicating that longs are paying shorts.
In addition to that, Coinglass’s long-to-short ratio for CAKE reads 1.11 on Thursday, nearing the highest level over a month. The ratio moving above one indicates that more traders are betting on CAKE to rally higher.
The bullish scenario comes after Pancakeswap announced earlier this week that the community had approved CAKE’s max supply reduction proposal.
The max supply has been reduced from 450 million to 400 million, and burns consistently outweigh emissions.
CAKE could rally towards $2.1
The CAKE/USDT 4-hour chart is bearish and efficient despite CAKE adding 4.5% to its value in the last 24 hours.
CAKE’s price was rejected at the weekly resistance level of $2.13 on Saturday and declined by 10% earlier this week. However, it rebounded on Wednesday and is now approaching the $2.0 maerk once again.
If CAKE continues its price recovery, it could rally towards the 50-day Exponential Moving Average (EMA) at $2.06.
The Relative Strength Index (RSI) on the 4-hour chart is 46, pointing upward toward the neutral 50 level, indicating fading bearish momentum. For the rally to be sustained, the RSI must move above the neutral level.
On the flip side, if CAKE’s daily candle closes below the $1.88 support level, it could extend the correction toward the support zone around $1.79.
