- CAKE saw a significant surge in the market and is targeting a new high.
- The market remained bullish, as evidenced by on-chain data; however, a correction before further rally is imminent.
PancakeSwap [CAKE] has seen a significant rally in the past 24 hours, surging 53% and bringing its weekly gains to over 100%. This movement follows a decline on the chart over the past month.
Analysis from AMBCrypto indicates there’s room for further price growth, with key metrics like its Total Value Locked (TVL) and fees generated on its protocol showing positive momentum.
However, a corrective phase remains possible.
A brief cooldown before continued rally
CAKE is the native token for PancakeSwap’s decentralized exchange with known affiliation to the BSC chain.
On the chart, CAKE experienced a notable price surge, clearing major resistance levels at 2.414 and 2.816, as indicated by the Fibonacci Retracement Line.
However, it failed to break above the 3.217 resistance zone and is now experiencing a price correction, dropping lower.
The Relative Strength Index (RSI) crossed the overbought region. With a current RSI reading of 75.24, the price appears overvalued and likely to correct.
Using the Fibonacci line, the potential price drop could bring the asset back to 2.816 or lower to 2.414.
These levels may now act as support, adding momentum for a price rebound from its current level.
Bullish sentiment still intact
A study of the TVL, which measures the amount of assets staked in a protocol, shows a noticeable increase in PancakeSwap.
In the past 24 hours, the TVL has surged by 15.91% and is now trading at $1.857 billion, establishing a new high for February.
At this pace, the TVL could extend beyond $2.003 billion, the highest point of the year.
Source: DeFiLlama
Adding to the bullish sentiment is the rise in fees generated on PancakeSwap. In the past week, it generated $50.04 million in fees, with an additional $8.43 million in the last 24 hours, according to DeFiLlama.
This marks the highest fee generated by any decentralized app on its platform.
Such positive activities indicate growing demand, which could fuel CAKE’s rally and rebound.
Can “CZ” support for memecoin fuel momentum?
Changpeng Zhao (CZ), the founder of the BSC chain, where PancakeSwap is native, announced he is considering launching a memecoin for his dog.
This could have contributed to the recent surge, as traders may be positioning for potential opportunities in memecoins.
He also mentioned that he “might even interact with a couple of the memes on BNB Chain.” If this happens, it could drive a rally for CAKE, PancakeSwap’s native token, which would likely facilitate the trading of these tokens.
