CAKE Cryptocurrency Drops 32% in January Despite High Trade Volume
Price Drop in CAKE: What Do the Forecasts Say for February?
The price of the cryptocurrency CAKE fell by 32% in January. This decline occurred despite an increase in the monthly trading volume at PancakeSwap, the decentralized exchange (DEX) powered by CAKE. According to CoinMarketCap, CAKE reached a peak of $3.6 on December 29, 2023, and fell to a monthly low of $2.45 by the end of January.
Trading Volume Increases, Price Drops
Despite the price drop, trading volume on PancakeSwap has increased. According to data from DefiLlama, the trading volume in January amounted to a total of $15 billion, the highest level since May 2023. Despite the increased trading volume, PancakeSwap recorded a double-digit decline in protocol fees in January. The exchange generated transaction fees totaling $9.4 million in January, a decrease of 16% from the $11.4 million in December.
CAKE Investors Remain Cautious
The momentum indicators for CAKE suggest a decrease in buying pressure. For example, the token’s Relative Strength Index (RSI) trended near the oversold zone at 38.56, while the Money Flow Index (MFI) showed a value of 38.15. These values suggest that CAKE sales have significantly exceeded accumulation. CAKE’s MACD line (blue) was below zero at -0.105, indicating that selling pressure is stronger than buying pressure.
Outlook for February
The forecasts for February are still unclear. Despite the recent price drop and negative indicators, a recovery might be possible if the trading volume on PancakeSwap continues to be high. However, investors should be cautious and closely monitor market developments.
Source: Abiodun Oladokun, AMBCrypto
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