PancakeSwap (CAKE) is showing renewed bullish strength as buyers defend a crucial support zone after its recent correction. A recovering MACD suggests downside momentum is easing, while improving price action could support another advance. However, weaker trading activity signals cautious participation. Persistent token burns further strengthen the token’s long-term deflationary outlook.
CAKE Price Holds Above Crucial Support Zone
PancakeSwap’s CAKE token is showing renewed strength after a strong rally followed by a short-term correction. Crypto analyst GranMago highlighted the gray support zone as a key area to watch, noting that holding this region could preserve CAKE’s bullish structure.
The setup comes after CAKE climbed from around $1.50 in late August to approximately $2.40 on September 8 before pulling back toward $2.10.
Currently, CAKE is trading near $2.1965 and has started recovering from the recent decline. GranMago’s outlook remains constructive as long as buyers defend the highlighted support zone. A sustained hold could provide a foundation for another upward move and potentially push CAKE toward the analyst’s projected target region.
Also Read: CAKE Price Prediction: Falling Wedge Sets Up Potential Rally to $2.30
CAKE Price Could Surge to $2.40 If Support Holds
GranMago’s latest chart analysis focuses primarily on the relationship between CAKE’s current price and the gray support area. The analyst argues that maintaining this zone would keep the bullish scenario intact and could enable the token to advance toward the $2.30-$2.40 range.
Source: GranMango’s X Post
However, the bullish scenario comes with a clear invalidation condition. If CAKE loses the highlighted gray support zone, the current setup would no longer remain valid according to the analyst. This makes the support area an important level for traders watching the token’s next directional move.
CAKE Price Could Surge to $2.40 If Support Holds
TradingView data on the four-hour CAKE chart provides additional insight into the token’s recent price behavior. After its powerful advance, CAKE encountered selling pressure near the $2.40 area. The subsequent decline toward $2.10 reflected a period of profit-taking and weakening short-term momentum.
Source: TradingView
The MACD indicator also confirmed this cooling phase. As CAKE approached its recent peak, the MACD crossed below its signal line, while red histogram bars appeared on the chart. This combination suggested that buying pressure was losing strength and that sellers were gaining short-term influence.
However, the latest price action offers a more encouraging signal for bulls. A green candlestick has appeared as the MACD histogram begins to flatten, indicating that downside momentum may be slowing. If this stabilization develops into stronger buying pressure, CAKE could attempt another move toward its nearby resistance levels.
Trading Activity Cools Across CAKE Market
Though there is improvement in pricing, derivatives and trading information show that market activity has generally weakened. From the data from CoinGlass, CAKE’s trading volume has fallen 20.56% to $30.80 million, with open interest having fallen 14.65% to $38.53 million.
The dual effect of volume and open interest falling together indicates that there is increased caution among traders after the recent run-up. Open interest falling implies there are fewer positions held, while volume falling implies there is less trading happening in the market.
While this does not rule out the technical bullish setup in any way, it does suggest that the token needs new participation in order to make a further substantial move. An increase in the volume along with stronger price action will serve as a validation for this.
Three Years of Deflation Strengthen CAKE Narrative
In addition to technical metrics, the tokenomics of PancakeSwap is also giving a significant aspect to CAKE tokens. According to BSCN, CAKE has managed to record 36 straight months where token burns have outpaced supply.
The deflationary trend started in September 2023 and lasted until August 2026. Specifically in August, it is believed that PancakeSwap burnt 2.75 million CAKE and minted 674,316 CAKE. Consequently, the net decrease in the supply of CAKE in August alone was in excess of 2 million CAKE.
On an overall note, almost 59.7 million CAKE has been taken out of the maximum supply. Continuous lowering of supplies can help develop a strong story on tokenomics in the long run by reducing the supply of tokens in circulation.
What Happens Next?
The next move by CAKE will be determined by how buyers manage to defend the key support level. If the coin holds the support level and the buying interest starts to pick up pace, then the upside momentum could propel the coin towards the resistance levels of $2.30-$2.40. A breakout above these levels would improve the positive bias.
Also Read: CAKE Price Eyes Major Upside Toward $5 as Open Interest and TVL Rise
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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