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PancakeSwap (CAKE) has seen a remarkable 9% rise in a single day, extending its impressive monthly gains to 42%. This increase is influenced by the broader market rally in the cryptocurrency market, driven by Ethereum's (ETH) recent performance.
ETH has seen a 16% increase over the past week, now trading above $3,665, fueling optimism for altcoins like CAKE. Technical analysts are closely watching CAKE's price action, as a developing harmonic pattern on the daily chart suggests further potential upside for the token.
CAKE’s daily chart is currently forming a Bearish ABCD harmonic pattern, which, despite its “bearish” name, has historically signaled bullish momentum during the CD leg. The pattern begins at Point A near $1.516, then rises to Point B before retracing to Point C at $1.928.
Now, CAKE is advancing along the CD leg toward Point D. This phase is particularly significant as it is the strongest part of the pattern, attracting momentum traders looking to capitalize on the potential rally.
The critical phase of this pattern is known as the Potential Reversal Zone (PRZ), which corresponds to the 1.65 Fibonacci extension of the BC leg. Analysts project a target price of $3.59, a 23% increase from current levels. This target is reinforced by the symmetry of the AB leg, providing further confidence in the bullish case for CAKE.
For this bullish momentum to continue, CAKE must hold above its 50-day moving average, which currently sits at $2.36. The 50-day moving average has now become a dynamic support level, making it a crucial point for sustaining the uptrend.
A breakdown below this level could invalidate the bullish pattern and lead to a pullback. Therefore, traders will need to closely monitor this key support level.
The strength of Ethereum’s recent performance has played a significant role in lifting the entire cryptocurrency market, including altcoins like PancakeSwap. As Ethereum continues to lead the charge, its bullish momentum is spreading to other cryptocurrencies, sparking positive sentiment throughout the market.
Also Read: Ethereum Price Prediction: Will It Reach $15,000 by Year-End?
As PancakeSwap (CAKE) continues to benefit from the broader bullish trend driven by Ethereum’s performance, the technical outlook suggests there could be more upside ahead. The potential for a 23% gain, projected by the developing harmonic pattern, makes CAKE an intriguing prospect for traders.
However, maintaining momentum and holding above key support levels will be critical for the token’s continued rally. As always, traders are advised to exercise caution and conduct thorough research, as the volatile nature of the cryptocurrency market can alter price trajectories at any moment.
