Reversal Pattern May Push Prices To $5 Mark

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.

Source- Tradingview

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