Reversal Within Pattern Hints At Short-Term Recovery In CAKE Price
The recent correction phase in the crypto market assisted sellers in completing the bear cycle within a broadening channel pattern. As a result, the CAKE price plugged back to the bottom trendline to replenish the bullish momentum. If the buying pressure surpasses the negative market sentiment, the CAKE price could recover to $5.
Key points CAKE analysis:
- A CAKE price has risen 5.5% in the past two days
- The breached 20-and-50-day EMA may act as a viable resistance
- The intraday trading volume in the CAKE token is $60.7 Million, indicating a 50% gain.
Source- Tradingview
Amidst the ongoing correction, a number of cryptocurrencies took a significant hit and are closing to their 2022 bottom support. However, the CAKE price maintains a broadening wedge pattern holding a reversal opportunity in the short term. The last reversal from the pattern’s resistance trendline on August 11th triggered aggressive selling from the traders.
As a result, the CAKE price plunged 25% and retested the combined support of the ascending trendline and $3.55. Today, the altcoin is 1.09% up and attempts another reversal from this dynamic support.
However, the volume activity is quite low to confirm if the buyers are committed to this reversal. But if they do, the CAKE price may witness another bull cycle within this pattern which may push the prices to the $5 mark.
However, the nature of this bearish continuation pattern is to accelerate the selling pressure once the price breaks the support trendline. Therefore, until the price doesn’t break above the resistance, to invalidate this bearish thesis, the CAKE price is threatened with a significant correction.
Thus, if the sellers breach the bottom trendline, the coin price will sink by 30% and revisit its bottom 2022 bottom support of $2.61.
Technical indicator
EMAs: the flattish 50-and-100-day EMA accentuates a sideways rally in the short term. However, these slope trading above the CAKE price may stall the expected bullish reversal.2
Relative Strength Index: a significant drop in daily-RSI slope shows the overextend buying during the prior recovery rally has stabilized, and further recovery can work at ease. However, indicator slopes below 50% indicate negative sentiment among traders.
- Resistance levels- $4.2, $4.56
- Support levels- $3.54and $3.23
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