Cake Technical Analysis: Will Prices Pump Again?
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A morning star candle formation at the support trendline indicates the CAKE buyers are attempting a bullish reversal. However, a breakout from the 50-day SMA resistance is needed to confirm a bull cycle. Can buyers pump the prices above the SMA, or will the support trendline fall?
Key points:
Source- TradingView
CAKE Technical Analysis
The CAKE/USDT technical chart shows a triangle pattern in play. In early August, the sharp correction in the crypto market plunged the prices from the pattern’s resistance trendline to the support trendline.
The buyers at the support trendline attempted a bullish reversal, but the increased supply at the 50-day SMA kept the trend contained. Moreover, the opposing SMA plummeted the prices back to the support trendline.
If the selling pressure persists, the CAKE price is poised to plunge below the support trendline and trigger the bearish pattern. The breakout rally can fall to the $3.24 mark, accounting for a drop of 15%.
On a contrary note, if the buyers rebound the coin price from the support trendline, a possibility to trigger a bull cycle within the pattern emerges again. First, however, the altcoin has to reclaim the immediate resistance of $4 to give a better confirmation for a bull rally. Doing so, the prices may drive 14% higher to hit the $4.68 mark.
Technical indicators
The daily RSI is under the neutral line, reflecting growth in bearish market sentiment. However, the lack of bearish divergence helps maintain an uptrend. The MACD and signal lines maintain a declining trend, but the decreasing bearish gap teases a bullish crossover. Hence, the technical indicators maintain an overall positive outlook for CAKE prices.
Resistance Levels: $4 and $4.25
Support Levels: $3.5 and $3.25