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PancakeSwap TVL Back Above $3 Billion, CAKE Eyes Top 100 Comeback on Bullish Price Pattern

Last Updated May 10, 2024 9:41 AM
Valdrin Tahiri
Last Updated May 10, 2024 9:41 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The CAKE price has fallen nearly 50% since reaching its yearly high of $5.24 on March 13.
  • CAKE created a double bottom pattern between April 13 and May 1 and bounced.
  • PancakeSwap’s Total Value Locked (TVL) has increased markedly since the start of the year.

PancakeSwap is the leading BNB Smart Chain decentralized exchange. Its native token, CAKE, used to be in the top 40 biggest cryptocurrencies  but has fallen out of favor in 2023 and 2024, currently being outside of the top 100.

In any case, its volume and TVL surged in March-April even though its price has corrected since March 13. There are positive signs developing, resembling those that have previously led to significant increases in other cryptocurrencies.

CAKE trades above an important support level, a bounce above which can be a trigger for a notable rally, bringing CAKE back to the top 100 cryptocurrencies.

CAKE Creates Bullish Pattern but Still Trades Below Resistance

The ongoing CAKE price correction caused a breakdown from an ascending support trend line on April 13. At the time, the trend line had existed for 160 days. Then, CAKE validated the trend line as resistance (red icon) on April 23.

After the ensuing rejection, CAKE created a double bottom pattern on May 1 and has increased since. The double bottom is considered a bullish pattern.

CAKE Price Double Bottom
CAKE/USDT Daily Chart | Credit: TradingView

The daily RSI and MACD have both generated a notable bullish divergence (green), supporting the bullish pattern. A nearly identical divergence has led to significant price increases for other altcoins such as TRX, which is one of the best performers since the start of May.

PancakeSwap’s Total Value Locked Keeps Increasing

In a trend observed throughout most decentralized exchanges, PancakeSwap’s TVL declined steadily starting 2021. This has changed in 2024, since the exchange enjoyed a surge in both TVL and volume. Its TVL of $3.32 billion ranks second in the DEX rankings , trailing only Uniswap’s $5.33 billion.

PancakeSwap TVL
PancakeSwap TVL | Credit: DeFiLlama

Staking VeCake  gives an APR of up to 4.31%, depending on the amount of time the token is locked. However, these rewards can grow through bribe yield , given by external bribe marketplaces  in order for veCAKE holders to drive emissions toward their preferred liquidity pools and projects. This has likely contributed to the attractiveness of staking CAKE and in turn the increase in TVL.

The most traded pairs  in the DEX are USDT/WBNB, USDT/USDC and ETH/BTCB, the latter of which is Bitcoin BEP2, a token on the BNB Smart Chain backed by a BTC reserve.

PancakeSwap Revenue
PancakeSwap Revenue & Fees | Credit: DeFiLlama

Besides its increase in TVL, there is a notable increase in both fees and revenues in March and April. In fact, the $15.52 million revenue in March is the highest since January 2022. It caused a net mint of over 700,000 , which is a new all-time high. More than 99% of the fees  were on BSC, even though PancakeSwap is available on eight other chains.

CAKE Price Prediction: $2.65 Area Holds Key to Future Trend

The daily time frame shows that the $2.65 area is crucial for the future trend’s direction. The area is both the 0.618 Fibonacci retracement support level and a horizontal support area. So, reclaiming it is an important step in creating a bullish structure.

Moreover, the decrease since the yearly high shows a completed A-B-C corrective structure (white). The sub-wave count is in black, implying the correction ended on May 1.

Even though the count is bullish, and it aligns with the positive price action and indicator readings, this possibility will not be confirmed until the price increases above the wave A low (red) at $3.50. The level also coincides with a descending resistance trend line existing since the highs.

Wave Count
CAKE/USDT Daily Chart | Credit: TradingView

Until then, the possibility remains that CAKE is in a five-wave downward movement (yellow) instead of an A-B-C structure.

However, as stated before, the more probable scenario is a completed correction because of the positive price action and indicator readings. A breakout from the trend line and $3.50 level can trigger an increase above the yearly high of $5.24.

CAKE Could Return to Top 100

The CAKE price has not reflected the increase in PancakeSwap’s volume and TVL since March. However, this can change if the current double bottom pattern plays out and CAKE confirms its increase above $2.65. A breakout above the $3.50 level will confirm the correction is over and could lead to new highs.

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