What initially started as a sweet bite for investors, is slowly turning sour. Here we are talking about the cake token, which has fallen a whopping 92% from all-time high of $44.02 to $3.57 in a span of almost 3 years.
While the whole crypto market is experiencing a turbulent time, our boy here has taken a bigger hit, but what exactly lies ahead for this token. Before dwelling into technical analysis, let’s take a look at what this token is.
Cake Token is a cryptocurrency that was launched in 2020 by the DeFi (Decentralized Finance) platform Pancake Swap. It is built on the Binance Smart Chain (BSC) and is designed to be a governance token for the Pancake Swap platform. Cake Token has several use cases within the PancakeSwap ecosystem, including being used for staking, liquidity provision, yield farming, and participating in community governance.
Staking Cake Tokens can earn users a share of the transaction fees generated on the PancakeSwap platform, while liquidity provision can earn user’s additional tokens as rewards. Yield farming allows users to earn rewards by providing liquidity to various liquidity pools on the platform. In addition to its utility within the Pancake Swap ecosystem, Cake Token has also gained popularity as a speculative investment asset.
Since its launch, Cake Token has experienced significant price appreciation, driven in part by growing interest in DeFi and the Binance Smart Chain. The total supply of Cake Tokens is capped at 250 million, with a circulating supply of approximately 174 million tokens. The token has a market capitalization of over $3 billion and is traded on several cryptocurrency exchanges. Initially the cake bite turned sweeter with every bite as the launch price was on the lower end.
Cake Token (CAKE) was launched on September 30th, 2020, with an initial price of $0.24 USD. At the time of launch, the total market capitalization of the token was approximately $2.4 million USD. The early days of CAKE were marked by low trading volumes and a relatively small community of investors and traders. However, the platform began to gain traction over the following months as more people became interested in DeFi and the potential of automated market makers.
As the popularity of PancakeSwap grew, so too did the demand for CAKE. The price of CAKE began to rise steadily throughout the latter half of 2020, and by January 2021, it had surpassed $1 USD per token. Since then, the price of CAKE has continued to increase, reaching an all-time high of $47.86 USD in late November 2022. This represents a significant increase from the launch price of just $0.24 USD.
The price is being rejected from the horizontal resistance zone in the 2D time frame. The price is currently trying to break its support trendline of the Ascending triangle after breaking the horizontal S/R zone. If it is successful, it will then be able to continue falling.
While in the 1D time frame, we can see the graph moving in a range, and we should be able to see a breakout soon, while an upper-level breakout should get us to a target of $5 and eventually $9, a lower-level breakout seems more likely scenario as of now.
Overall, the recent price action of CAKE is a testament to the growing popularity of DeFi and AMMs, as well as the success of the PancakeSwap platform. As the crypto market continues to evolve and grow, it will be interesting to see how CAKE and other tokens continue to perform.