CAKE could dip below $2.6 as whales reduce exposure: check forecast

The cryptocurrency market has been extremely volatile this month, with bullish and bearish price actions appearing regularly.

Bitcoin reclaimed the $111k mark on Monday but has given up its profit and is now trading below $108k once again.

Bitcoin’s volatile price action has affected altcoins, with most of them down by 4% or more in the last 24 hours.

PancakeSwap (CAKE) has lost 6.5% of its value and risks dropping lower as whales reduce exposure. 

Whales offload CAKE tokens as bullish momentum fades

CAKE, the native token of the PancakeSwap DEX, is down 6.5% in the last 24 hours and is now trading at $2.75 per coin.

The bearish performance comes after the token faced a rejection around the $3.06 resistance level.

On-chain data suggests a further bearish outlook for the cryptocurrency as whales reduce their position in the market.

Currently, PancakeSwap’s Network Realised Profit/Loss (NPL) metric indicates that holders are booking profits. 

Holders are selling their tokens at a significant profit, thus increasing the selling pressure on CAKE.

The token’s Supply Distribution data also suggests a bearish outlook as the number of whales is declining.

On-chain data shows that whales holding between 100,000 and 100 million CAKE tokens have sold more than 100 million tokens over the past week.

Data obtained from Coinglass also revealed that there are more short traders on CAKE compared to long positions.

The long-to-short ratio for CAKE reads 0.66 today, the lowest level recorded in over a month.

The decline indicates a bearish sentiment, with more holders betting for the asset price to dip in the near term. 

CAKE could dip below $2.60 amid strong bearish sentiment

The CAKE/USD 4H chart is bearish and efficient as PancakeSwap has been underperforming in recent days.

The bearish performance comes as CAKE has struggled near the 50-day Exponential Moving Average (EMA) at $2.94 over the last few days. 

The technical indicators suggest further bearish momentum in the near term.

If the correction continues, CAKE could extend its decline towards the 200-day EMA at $2.60.

Failure to protect this support level could see CAKE drop to the October 10 low of $1.4. 

The Relative Strength Index (RSI) on the 4-hour chart reads 44, below the neutral level of 50, and indicates a strong bearish momentum.

The Moving Average Convergence Divergence (MACD) also showed a bearish crossover since last week, adding an extra confluence to the bearish trend. 

However, if the bulls regain control and push CAKE above the 50-day EMA at $2.94 over the next few hours, the token could rally higher and reclaim the $3.88 high created on October 14. 

With Bitcoin and other leading altcoins underperforming, the momentum remains bearish, and CAKE could suffer further losses in the near term. 

The post CAKE could dip below $2.6 as whales reduce exposure: check forecast appeared first on Invezz