Reversal Pattern May Push Prices To $5 Mark

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The U-shaped recovery in PancakeSwap (CAKE) price has knocked out another resistance of $4.165, suggesting the buyers are aiming another leg higher. Moreover, a 50% hike in volume activity indicates that market participants are confident of this breakout, which may propel altcoin to $5 levels. However, is there an entry opportunity for side-lined traders?

Key points: 

A bullish crossover of 20-and-50-day EMA encourages a $4.165 breakout
The rising ADX slopes reflect growth in underlying bullishness
The intraday trading volume in the PancakeSwap token is $60.7 Million, indicating a 50% gain.

CAKE/USDT ChartSource- Tradingview

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Under the influence of a rounding bottom pattern, the CAKE/USDT pair has recovered 75.65% from the $2.45 support. This nearly two-month bull run has breached multiple resistance for the altcoin to reach its current price of $4.38.

Furthermore, With a 5.43% intraday jump, the CAKE price gives a bullish breakout from $4.16 resistance. As per the technical setup, the coin price should rise to the rounding bottom neckline, which is the $5 mark in our case.

The CAKE price has been on a winning streak over the past five days, registering 17% growth. In addition, the sustained volume rise during this post-correction rally validates a genuine recovery cycle.

A daily candlestick closing above the $4.165 resistance would flip it to a potential launchpad. A possible retest to this flipped support would offer an entry opportunity for the buyers with expected gains of 13.7%.

However, the coin chart shows an in-between resistance of $4.57, which may stall the bullish attempt before it hits the $5 psychological barrier.

Technical indicator

Bollinger band indicator: today’s breakout candle reaches the indicator’s upper band indicating aggressive buying from traders. However, previously such retests had triggered a minor correction, bolstering a pullback to the $4.165 mark.

Vortex indicator: a significant gap between the VI+ and VI- slopes, indicating growth in bullish momentum. Moreover, with no considerable divergence in this indicator, the altcoin is expected to continue its rally to $5.

Resistance levels- $4.58, $5
Support levels- $4.165 and $3.78

From the past 5 years I working in Journalism. I follow the Blockchain & Cryptocurrency from last 3 years. I have written on a variety of different topics including fashion, beauty, entertainment, and finance. raech out to me at brian (at) coingape.com

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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