PancakeSwap, the leading decentralized exchange on the BSC Chain, has experienced a remarkable doubling in value over the past month, despite the downturn of many cryptocurrencies.
This past Friday, PancakeSwap (CAKE) surged to a peak of $2.80, marking its highest level since February 25 and a staggering 145% increase from its lowest point this month.
This impressive rise coincided with the platform’s growing market share within the DEX sector. Recent data shows that PancakeSwap’s weekly trading volume saw a near 60% increase over the last week, reaching $14.1 billion, contributing to a total volume of $53 billion for the month. Its weekly volume surpassed that of Uniswap, Raydium, Meteora, and Fluid combined.
The uptick in trading activity on PancakeSwap led to a significant spike in network fees. Recent reports indicate that the platform has generated nearly $120 million in revenue this year, positioning it as the second most profitable DEX in the market, trailing only Uniswap.
However, it remains uncertain whether this volume increase will be sustained, as it appears to have been fueled by newly launched meme coins within the ecosystem. One of the most prominent was Mubarak, which saw its token rise sharply before experiencing a pullback; its market cap fell from $200 million to $110 million this week.
Other notable meme coins on the BSC chain included Mansa, AOPA, Siren, and AIFlow Token. Typically, these meme tokens exhibit drastic spikes followed by steep drops as insiders take profits. Consequently, similar to what has happened with Solana (SOL) DEXes, there’s a chance that the surge in PancakeSwap’s volume may be temporary.
Another concern for the CAKE price stems from a downturn in network growth and active addresses. The network growth metric has declined from 2,186 on March 17 to 738, while daily active addresses have fallen from a peak of 13.6k to just 6,020.
Analysis of CAKE Price
The price of CAKE has surged from its year-to-date low of $1.1825 to a high of $2.9, largely driven by the increased trading volume. It has crossed above both the 50-day and 200-day moving averages, indicating bullish momentum.
PancakeSwap’s price has reached an important pivot reversal point of $2.73 as per the Murrey Math Lines. Technical indicators, including the Relative Strength Index and the Awesome Oscillator, are showing upward trends.
Therefore, CAKE is likely to continue rising, with a potential target of $3.4, which aligns with its peak from February and the overshoot threshold of the Murrey Math Lines. However, given the decline in active addresses and network growth, there exists a risk of a pullback once that resistance level is approached.