Last week PancakeSwap experienced a surge in volume which in turn led to a spike in CAKE demand.
This translated into significant upside for the token but fast forward to today and the first wave of profit-taking is has kicked off.
The PancakeSwap native token pulled off an impressive 102% upside from its lowest price point to recent peak so far this month.
It peaked at $2.81 on Tuesday. Since then, it pulled back by a sizable margin. CAKE was down to $2.32 at press time, after 17.48% pullback from latest its local high.
It was not yet overbought at its aforementioned peak, which suggests that the pullback was largely due to some profit-taking.
While Pancakeswap (CAKE) bears were dominant in the last 24 hours, it remained unclear whether the profit-taking would continue to pull it to a lower price tag.
Nevertheless, the recent performance revealed some interesting findings that could offer insights into CAKE prospects in coming months.
CAKE’s Demand in the Last 2 Months Outpaced its November 2024 Demand
Derivatives activities heighted some noteworthy observations. For example, open interest just clocked a high of $93.29 million on Tuesday and previously surged to $98.44 million at its peak in February.
The aforementioned 2 peaks in open interest were notably higher compared to its highest peak in 2024 which occurred in December.
Derivatives volumes also demonstrated a similar observation, confirming more activity in the segment.
The surge in derivatives activity related to Pancakeswap could signal high appetite for investors, which could also indicate the possibility of a liquidation event.
Spot demand was not quite in tandem, given that net inflows were relatively weaker compared to February.
In addition, there was a massive spike in spot outflows by roughly $10 million. This marks the highest daily spot outflows recorded in the last 10 months.
CAKE long liquidations in the last 24 hours amounted to $1.42 million while short liquidations were less than half that amount.
Can Strong PancakeSwap Volumes Support a Higher Floor Price?
The underlying cause of the latest hype around CAKE may offer insights into how things could play out for the token.
The PancakeSwap DEX has been experiencing robust utility lately, hence the surge in appetite for CAKE.
PancakeSwap ranked as the top DEX according to DeFiLlama. Its volume in the last 24 hours soared to $2.67 billion which was more than double the volume achieved by the runner-up.
Both token volume and revenue were up on PancakeSwap, with daily levels recently surpassing over $1 million each.
The token volume and revenue surge confirms PancakeSwap’s surging activity. This is also no coincidence but rather a reflection of recent market dynamics.
DeFiLlama data also revealed that DEX volumes this year surged to new highs. It even surpassed levels observed in the previous bull run.
This means CAKE demand could surge higher if this trend continues to proliferate in the coming months.
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