Double Top Pattern Fallout Teases 18% Fall In CAKE

Last weekend the higher price rejection candle at $10 resistance indicated the traders are aggressively selling on a higher level. Thus, the resulting reversal dumped the Pancake(CAKE) price back to $7.6 support with the formation of a double top pattern. A possible reversal will trigger another 14.4% fall.

Key points: 

• The CAKE reflects a 12% loss in the past 24hr
• A 50-and-100-day SMA performs a bullish crossover
• The intraday trading volume in the CAKE token is $172.8 Million, indicating a 3.82% loss.

Source- Tradingview

Over the past two months, the Pancake(Cake) price reverted from the $10 resistance twice, reflecting a double top pattern in the daily time frame chart. 

On April 12th, the bullish reversal from the $7.6 support mounted a new higher low, suggesting the traders’ sentiment flipped from selling the rallies to buying on dips. However, the reversal rally couldn’t surpass the previous swing high resistance of $10, undermining the uptrend possibility.

Furthermore, the CAKE price turned down from the $10 resistance and fell 21% within three days. As a result, the sellers pulled the altcoin to the $7.6-$7.15 support zone, which is the neckline mark of a double bottom pattern.

A daily-candlestick closing below the $7.15 mark would accelerate the selling pressure and dump the CAKE price 14.4% lower to $6.1 support.

Technical indicator

SMA: A bullish crossover among the 50-and-100-day SMA at the $7.6 mark provides additional support for a price reversal. However, if the sellers undermine this set-up and plunge below the $7.16 support, the traders can expect a freefall to the $6.1 mark.

MACD indicator: The fast and slow line offers a sell signal with a negative crossover in the bullish region. Moreover, these lines approaching the neutral zone suggest weakness in the bullish momentum.

• Resistance levels- $.86, $10
• Support levels- $7.6-7.1 and $6.1

From the past 5 years I working in Journalism. I follow the Blockchain & Cryptocurrency from last 3 years. I have written on a variety of different topics including fashion, beauty, entertainment, and finance. raech out to me at brian (at) coingape.com

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