CAKE is one of my second tier holdings. I've been bullish on it for a long time as the platform token for pancakeswap.finance.
And now that we have the CAKE Kingdom on cubdefi.com, it's a no-brainer to put that capital to work and auto-compound it.
But I was glancing at the chart today and saw that it is at a critical level.
So here's a chart-reading 101 kind of thing.
We have 2 major indications that this price around $20 is a critical level.
On the left side of the chart, you can see that CAKE reached $20 and retraced in Feb and late Mar.
This is resistance. Selling pressure overcame buying pressure.
Then price broke through, ran up to 28 or so, and came back to $20 in late Apr. The $20 level stopped the fall in price, and CAKE continued back up.
This is support.
It's common for old resistance levels to become support.
Then we had the big move and big crash in May. CAKE came all the way back. You can see on the right hand side of the chart a sort-of W-shaped pattern. This is a double bottom. The peak of that W is back at our $20 level.
So an old resistance level became support and is now resistance again. That's the power of psychology in the markets. People feel fear and greed at the missed opportunities and decide to get in or get out at these repeated prices.
One thing is for sure: CAKE is not going to stay at $20.
