PancakeSwap (CAKE) remains under strong selling pressure after failing to reclaim a key technical resistance. On December 9, CAKE was rejected at the 50-day Exponential Moving Average (EMA) near $2.36, a level that also aligns closely with a descending trendline that has been intact since early October. This confluence of resistance significantly strengthened sellers’ control, triggering a sharp pullback of nearly 14% shortly afterward.
Selling momentum intensified further into Tuesday and Wednesday, with CAKE dropping an additional 6%, marking its lowest price in the past two months at approximately $1.88. The broader price structure continues to form lower highs and lower lows, confirming that the market remains firmly in a bearish trend.
Technical Outlook: Bears Still in Control
From a technical perspective, momentum indicators strongly support the bearish narrative:
Relative Strength Index (RSI) on the daily timeframe is currently hovering around 31, approaching the oversold threshold. While this suggests selling pressure may be stretched, it also confirms that bearish momentum is still dominant.
MACD (Moving Average Convergence Divergence) has maintained a bearish crossover since Sunday, with the histogram remaining in negative territory. This indicates that downside momentum has not yet exhausted itself.
Price action continues to trade below both the 50-day EMA and the descending trendline, reinforcing the idea that rallies are likely to face strong selling pressure.
Key Support and Resistance Levels
Immediate Support: $1.88
Major Support: $1.51 (October 10 swing low)
Key Resistance: $2.13 (Weekly resistance)
Major Resistance: $2.36 (50-day EMA & trendline)
If the current downtrend persists, CAKE is likely to extend its decline toward the critical support zone near $1.51, which previously acted as a strong demand area in October.
Trade Scenarios (Not Financial Advice)
🔴 Bearish Scenario – Preferred Setup
Entry (Sell): $2.05 – $2.15 (rejection near weekly resistance)
Take Profit 1: $1.75
Take Profit 2: $1.51
Stop Loss: $2.38 (above 50-day EMA & trendline)
This setup offers a favorable risk-to-reward ratio, as selling near resistance aligns with the prevailing trend.
🟢 Bullish Relief Bounce Scenario (Counter-Trend)
If price shows strong bullish rejection near support:
Entry (Buy): $1.50 – $1.55
Take Profit: $1.90 – $2.05
Stop Loss: $1.42
This is strictly a short-term relief bounce trade, not a trend reversal, unless CAKE reclaims $2.36 with strong volume.
Conclusion
Overall, CAKE remains technically weak, with momentum indicators, moving averages, and market structure all favoring further downside in the short term. Traders should remain cautious and prioritize selling rallies until a clear trend reversal is confirmed. A sustained move above $2.36 would be required to invalidate the bearish outlook.
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