Holders of CAKE have endured a trying three weeks during which the value of cake has fallen to levels last seen in February 2021. What appeared to be an innocent retreat at first turned into a significant slump and raised more questions than it did answers.
The chief executive of PancakeSwap has just issued a statement outlining the matter, and it might shed light on why CAKE lost flavor. The statement claims that adjustments to CAKE’s tokenomics are reflected in its recent performance.
The chief chef of PancakeSwap explained that for the CAKE Syrup pool to be sustainable, adjustments to the platform’s inflation strategy were required. In order to create value for consumers, PancakeSwap recently suggested a 3-5% CAKE inflation rate. It also has plans to launch a new revenue-sharing model. PancakeSwap will continue to use the CAKE burn mechanism, the statement further indicated. Will this announcement signal a CAKE pivot, even though the recent moves duped investors and caused a significant downturn?
According to several metrics, there was a high likelihood that CAKE would receive some bullish reprieve over the next few days. For instance, its transaction count has been comparatively low over the past three weeks, but it recently had a sharp increase on May 8 during the trade.
During the same time span, there has been no address activity; but, in the last 24 hours, there have been signals of a resurgence. That’s not all, though. After a three-week break, even the whales are back in the water. Following its prior flat performance, CAKE’s supply distribution indicator verified the resurgence of trading activity since May 8.
Will demand increase as a result of these findings? At the time of publication, CAKE has managed to gain 3.61% over the previous 24 hours. In spite of this, it was still down more than 50% from its peak value in April.
At the present price, the steep discount might provide some motivation for purchasers, especially since CAKE was beginning to see some trading activity again. At its $1.91 price point at the time of writing, CAKE was still significantly oversold. This suggests there was a sizable upside potential, but whether it can secure sufficient demand will determine whether it can achieve a major bounce back.
On April 27 and 28, it earlier tried to hold a rally but was unsuccessful. The better bullish chances are due to the fact that this time it is supported by a rebound in activity, particularly from the whales.
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