The long tail rejection candle at $10 resistance suggests the Pancake(CAKE) buyers are exhausted from the recent recovery. A failed attempt to breach this resistance triggered a minor retracement and plunged the coin price to $8.75 flipped support. Will buyers continue the ongoing recovery, or there’s more in the correction phase?
Key points:
- The CAKE price retests a confluence of multiple support levels.
- The intraday trading volume in the CAKE token is $277.8 Million, indicating a 16% loss.
Source- Tradingview
The previously downtrend tumbled the CAKE price to a low of $5.32. However, responding to bullish divergence in the daily RSI chart, the coin rebounded from the bottom support with a massive greed candle on March 17th.
Moreover, the altcoin breached a highly influential descending trendline on the same day, indicating the focus has shifted to the upside. As a result, the post-retest rally pumped the CAKE price to a $10 psychological level, registering a 62% ROI.
Furthermore, the buyers tried to continue to bull run with a $10 breakout, but the sellers asserted absolute dominance and forced a candle closing below the resistance. The follow-up correction plunged the coin by 17.6%, hitting the confluence support of $8.75, 0.326 FIB, and 100-day EMA.
This cluster of technical support and decreasing volume activity suggests a good step-up for the price to bounce back. However, if they do, a bullish breakout from $10 is needed to provide additional confirmation.
Alternatively, if the correction continues, the traders could find another strong support at $7.
Technical analysis
The daily-RSI slope shows a sudden dip from the overbought region and beneath the 14-SMA; however, the indicator value above the neutral line maintains a bullish bias.
Moreover, the rising 20-and-50-day EMA aligned $8 physiological indicates the buyers possess more support level on the downside, suggesting the path to minimal resistance is upwards.
- Resistance levels- $10, $13.2
- Support levels- $8.75 and $7
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Source: https://coingape.com/markets/cake-price-analysis-cake-price-bounce-at-0-328-fibonacci/