PancakeSwap Investment Analysis


PancakeSwap is a DEX built on Binance Smart Chain using an automated market-making system. It is an upgrade of SushiSwap with an almost similar codebase. However, it has the advantage because of its cheaper and faster transactions. 

It also has a new feature known as yield farming that is across other contracts like lotteries and IFO. CAKE is the original token of PancakeSwap’s BEP-20.

Unlike the other AMM designs, Pancakeswap users receive LP tokens by rendering liquidity to different liquidity pools on the platform. The users then stake their LP tokens and get CAKE for a reward.

PancakeSwap Supply Curve Analysis

The PancakeSwap society had given a plan to decrease the CAKE discharge rate for the farm and lottery by 50% from 30 CAKE to 15 CAKE per block. The idea is to produce 40 CAKE, of which 15 are consumed, resulting in 25 CAKE per block.

All burn processes are currently manual. Presently, other supply devices include burning 9.09% of CAKE harvested from farms and sent to the dev address. Also, the burning of 10% of CAKE spent on lottery tickets and burning 100% of CAKE raised in IFOs.

There is no supply cap for CAKE; however, the PancakeSwap company plans to move to a society-led emissions design. Voting is held at the end of each month, allowing CAKE holders to decide how to adjust discharges.

At the time of writing, the CAKE price is $19.51. Based on the above supply curve analysis, the investment is a 131.4% return. The price is, however, will move to move to $45.14.

PancakeSwap’s possible profit is an analysis of the daily values of the crypto asset. This means that there is a high chance that CAKE can touch its all-time high price again soon.

CAKE Technical Analysis

Looking at the trading setup, trends are a mix, where the market is in a bearish flag pattern. The trend here is a downward continuation pattern which later will be resolving in a bearish breakdown.

However, the market can break out either way. On the contrary, if the trend moves upwards, it needs to move above 200-day MA and $20 levels to confirm a bullish trend.

On the Pattern, the price is on a Descending Triangle pattern. A breakout can happen in the direction of the current trend. Many traders can take a position once the price gets out of the triangle with increased volume.

The trend is neutral on a Short and Medium-term basis long-term basis, on a Downtrend. The MACD moving average line is above the signal line, indicating a Bullish sign. However, the RSI is on 50, which is neutral.

The OBV- On Balance Volume is at level, meaning that on up days volume is similar to the volume on down days. So the demand from buyers and supply from sellers are the same.

The support zone is between $20 and $15, while the resistance zone is between $30 and $40.