PancakeSwap (CAKE) falls to new all-time low

PancakeSwap (CAKE) has recovered since hitting a new all-time low on Jan. 22 but has yet to confirm a possible upside reversal.

Important price zone

PancakeSwap has been down since hitting an all-time high of $44.28 on April 30th.

In June, the price bounced off the $10 horizontal support area and started to recover, but only for a short time.

On the week of January 17-24, 2021, the price broke below the $10 support area which was a notable event as it caused a sharp drop to an all-time low.

Although the price has since recovered, it is still trading below this level. Until this level is restored, the trend cannot be considered bullish.

Weekly CAKE/USDT chart | Source: TradingView

Current model

The daily chart shows that CAKE has been falling into a descending parallel channel since August 26th. Such channels often contain corrective moves. Therefore, a break above it would be the most likely scenario. However, CAKE is still trading in the lower part of the channel, suggesting that a potential uptrend has yet to begin.

Also, a very significant bullish divergence has formed on the MACD (green line). Such divergences often precede strong upmoves.

However, the RSI, which is a momentum indicator, remains below the 50 level. For the uptrend to be confirmed, the RSI needs to move above this level.

If there is a break above the channel, the next area of ​​resistance is between $16.70 and $19. This area is created by the 0.5 – 0.618 Fib retracement resistance levels.

Daily CAKE/USDT chart | Source: TradingView

Short term movement

The two-hour chart of CAKE shows that there is no clear pattern other than an ascending parallel channel whose resistance line has not been confirmed enough times.

Furthermore, technical indicators are providing neutral indicators as the RSI is at 50 and the MACD is near zero.

The resistance line of this channel coincides with the mid-line of the long-term channel and is close to the horizontal level of $10. This supports the outlook from the longer-term timeframes, which suggests that the trend cannot be considered bullish until CAKE reaches these levels back.

CAKE/USDT 2 hour chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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