The price of PancakeSwap (CAKE) continued its slide on Friday as the native token of the eponymous platform DEX fell to its lowest level since July. The main reason for this crash is the negative publicity surrounding Binance, as PancakeSwap is part of the Binance Smart Chain (Bsc) ecosystem.
The price of CAKE is currently around $3.25. After dropping nearly 20% in the past 7 days, the market capitalization of this cryptocurrency stands at $522 million.
Is Binance awaiting the fate of FTX?
PancakeSwap is one of the biggest players in the decentralized finance (DeFi) space with a total value of deposits (TVL) of just over $3.2 billion. At the height of this platform’s popularity, it exceeded $12 billion.
Like Uniswap, PancakeSwap also enables decentralized trading of digital currencies. You can also find other solutions here, such as an NFT market, a crypto betting platform, and yield farming pools.
PancakeSwap is the largest DeFi app in the BNB smart chain. It also supports other blockchains, but its transaction volume is relatively low. According to the website, PancakeSeap has been used by over 1.9 million people in the past 30 days. During this period, over 55 million trades have been executed and there are $6.1 billion in staking accounts.
Decentralized protocols such as PancakeSwap or GMX profited from the crash of the centralized crypto exchange FTX. Many traders no longer want to trust people like Sam Bankman-Fried with their money and are turning to decentralized exchanges, which are more transparent and are currently considered safer.
Since all transactions on a DEX exchange can be tracked via on-chain data, anyone can track where their coins are in real time. In addition, CAKE holders participate in the management of the platform.
However, one of PancakeSwap’s biggest challenges is its connection to Binance, the largest centralized exchange in the world. In the past seven days, Binance customers withdrew over $7.7 billion in assets. Many believe that the post-collapse FTX controversy and increased scrutiny from US regulators could also lead to Binance’s insolvency. Such a situation is known in the crypto world as FUD – Fear, Uncertainty & Doubt.
On a positive note, PancakeSwap has also introduced yield farming on the new Aptos blockchain. The service will allow users to earn CAKE while supporting PancakeSwap by staking LP tokens.
CAKE Price Prediction
The price chart shows that the price of CAKE has fallen for the past seven consecutive days as investors worry about the Binance ecosystem. The coin moved below the 25- and 50-day moving average lines. It also broke below key support at $3.54 – the lowest price on November 23 and August 19.
The Relative Strength Index (RSI) slipped into oversold territory. Since stock prices are also falling right now, there is a chance that the coin will continue to decline. Then, sellers can target the key support at $3, which is around 15% below the current price.
In this article we explain how to buy or short sell CAKE.