PancakeSwap’s cryptocurrency, CAKE, appears to have checked its plunge that began in August, traversing a channel between $11.5 and $12.5.
At the time of writing (January 4), CAKE is at $12, around 73% from its all-time high, and is not showing any strong signs of resuming its bullish momentum.
Could the price return to an upward trajectory in the long term? Is it time to ‘buy’, ‘book’ or ‘sell’?
In this article, we look at recent developments in the PancakeSwap ecosystem, the latest CAKE coin news and long-term outlook.
How does PancakeSwap work?
PancakeSwap is a decentralized exchange (DEX) on the Binance Smart Chain (BSC). Launched last September by anonymous developers, it is similar to Uniswap on the Ethereum blockchain.
While centralized exchanges like Coinbase and Binance (which were banned in the UK earlier this year) are run by a single company, one can trade DEX without a broker. Like most decentralized finance (DeFi) activities to date, most DEXs are based on Ethereum. However, PancakeSwap aims to compete with Ethereum by offering lower fees and faster transactions, among other features.
PancakeSwap powers the Automated Market Maker (AMM) model. Users deposit their funds into the liquidity pool in exchange for income from the liquidity provider’s tokens, known as FLIP tokens. Users place their trades against the pool of liquidity. The holders of FLIP tokens can then use them to reclaim their stake in the liquidity pool and a share of the trading fee. Users can deposit and lock their FLIP tokens to farm, or win, additional tokens like CAKE and SYRUP, as a bonus. There is no set holding time before the tokens are decoded.
PancakeSwap has quickly attracted users since its launch as it allows traders to exchange tokens instantly without registering accounts and charging low transaction fees. Users can trade directly from their cryptocurrency wallet, as the cryptocurrency is not held on the exchange.
According to its website, it has a total of $12 billion in users, and 2.8 million active users have made 31 million transactions in the last 30 days. Although it is unclear how often these numbers are updated.
PancakeSwap launches NFT Market
The non-fungible token marketplace (NFT) for PancakeSwap launched on September 30, late from its September 22 launch date. NFT sales took off in 2021, with seven-day sales exceeding $1.6 billion in late August and rising to $685 million in October after plunging to $270 million in mid-September, according to data compiled by NonFungible.com. In the 30 days leading up to December 17, it reported total NFT sales of $1.488 billion.
All fees from the market and NFTs, or 2% of each trade, will be used to buy back and burn the CAKE coins. Users will need to hold CAKE coins to mint or generate NFTs, which may increase demand for the PancakeSwap token, while burning coins will reduce supply. Expected to provide price support.
In the first month, the market had traded more than 102,208 BNB coins, worth nearly $56.6 million, of which 2,044 BNB was used for buyback and cake burning. The developers are working on the second phase of the market, which will include the ability to buy and sell Binance Smart Chain NFTs to a third party.
Users voted in October to reduce the amount of CAKE tokens entering circulation from 15 per block to 14.5 per block, which will further reduce supply.
PancakeSwap has launched several Initial Farm Offerings (IFOs) in recent weeks, providing early access to new tokens once they are added to the exchange. The developers are looking at removing the need for users to create CAKE-BNB liquidity pools to join IFOs. They are also evaluating suggestions for “the NFT tool, storage requirements, and different weights for compilers. These updates take development time and resources, so you can expect incremental improvements as we bring new IFOs to the schedule rather than one big change at once,” they wrote in their monthly update blog post. .
CAKE Prices Stop After Cryptocurrency Drops
Cake price rose to $26.59 on August 26 from a low of $10.87 on July 20, but fell to $17.85 on September 8. The market returned to $23.72 on September 19, but unlike other cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), which reached all-time highs, CAKE fell in October, ending the month at $17.68, as the chart shows. .
The current price of $12 (January 4) is still well below the all-time high of $44.18 on April 30, which was reached during the crypto rally. It leaves it with a market capitalization of $3 billion, making it the 52nd largest cryptocurrency according to CoinMarketCap.
What are the possible expectations for the future price of the PancakeSwap token?
CAKE Coin Price Prediction: Can the Price Rebound in the Long Term?
At the time of writing, CAKE technical analysis from CoinCodex is bearish, with 2 indicators giving bullish and 22 bearish signals. Its PancakeSwap (CAKE) coin forecast estimated that the price could rise to $12.34 by January 9.
A CAKE crypto price forecast from the algorithm-based website Wallet Investor estimates that the price could reach $26.88 by the beginning of 2023 and move to $84 by the end of 2026.
DigitalCoin’s CAKE token price prediction suggests that the cryptocurrency could average $15.79 in 2022, rise to $25.79 in 2025 and reach an average of $43 in 2028 with a peak at $44.72 during that period.
The CAKE/USD forecast from the long-term price forecast was more optimistic, as it predicted that the price could rise from an average of $17.84 in 2022 to $55.26 by 2025 and $337.58 by 2030.
On the other hand, the coin price forecast was more cautious in its long-term forecast than the price forecast, as it predicted that the price of the CAKE token will end by 2022 at $15.87, 2023 at $16.73, 2025 at $24.02 and 2030 at $33.97.
It is important to keep in mind that the cryptocurrency markets remain very volatile, making it difficult to accurately predict the price of a coin within a few hours, and even more difficult to provide long-term estimates. As such, analysts and forecasting sites can misunderstand their forecasts.
We always recommend that you do your own research, and consider the latest market trends, news, technical and fundamental analysis and expert opinions before making any investment decision. You should also be aware that past price performance does not guarantee future returns and never invest more than you can afford to lose.
Crypto-audit firm Certik PancakeSwap has given a security score of 95 in its audit for the past month (until December 4).
However, whether PancakeSwap is safe for your wallet is the only decision you can make. Always do your research.
Whether the price of CAKE could reach the $100 mark depends on the direction of the broader cryptocurrency markets. Wallet Investor estimates that the price could reach $26.88 by the beginning of 2023 and move to $84 by the end of 2026. Price forecasts predict that the price could rise from an average of $17.84 in 2022 to $55.26 by 2025 and $337.58 by 2030.
Whether or not you believe these predictions is a decision that only you can make. Keep in mind that analysts and forecasting sites can misunderstand their forecasts.
Read More: ETC Price Prediction: Will it Boom After the Hard Fork?
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The difference between trading assets and contracts for difference
The main difference between trading CFDs and trading assets, such as commodities and stocks, is that you do not own the underlying asset when you are trading a CFD.
You can still profit if the market moves in your favour, or incur a loss if it moves against you. However, with traditional trading, you enter into a contract to exchange legal ownership of individual shares or commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of your CFD trade in order to open a position. But with traditional trading, you can buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there are fees when buying shares, for example.
CFDs attract overnight costs of making trades (unless you use 1-1) leverage, making them more suitable for short-term trading opportunities. Stocks and commodities are usually bought and held for a longer period. You may also pay a commission or broker fees when buying and selling assets directly and you will need a place to store them safely.
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