PancakeSwap (CAKE) extends its recovery thanks to positive signals from the derivatives market

PancakeSwap Price (CAKE) continues to consolidate its recovery trend, maintaining trading above the $1.95 level at the time of writing on Thursday, after rebounding from an important support zone established in the previous session. Indicators in the derivatives market are leaning towards a positive scenario, as evidenced by the CAKE funding rate turning positive and the number of long positions increasing significantly. Meanwhile, technical analysis signals still suggest room for growth, provided CAKE stays above the key support zone.

CAKE Derivatives Indicators Support Uptrend

The OI-Weighted Funding Rate data from Coinglass shows the market balance favoring expectations of CAKE recovery, as the number of traders betting on a downtrend narrows compared to those confident in an uptrend. Typically, a positive funding rate — where buyers pay sellers — reflects optimistic sentiment, while a negative funding rate indicates market pessimism and a preference for short positions.

Notably, this index turned positive on Wednesday and remains around 0.0046%, meaning long positions are paying fees to hold their positions. Historically, as shown in the chart, each time the funding rate shifts from negative to positive, CAKE’s price tends to experience significant upward moves, notably the breakout on January 13.

CAKE Funding Rate Chart | Source: Coinglass Not only that, the long/short ratio for CAKE according to Coinglass increased to 1.11 on Thursday, approaching the highest level in over a month. When this ratio exceeds 1, it indicates that most traders are leaning towards the scenario of PancakeSwap’s price continuing to rise.

CAKE Long/Short Ratio Chart | Source: Coinglass Alongside positive signals from the derivatives market, the proposal to cut CAKE’s maximum supply was officially approved on Monday. Accordingly, the maximum supply was reduced from 450 million to 400 million tokens, while the burned tokens have consistently exceeded new issuances. This is an important long-term factor, as reducing supply and maintaining the burn mechanism will decrease circulating supply, increase scarcity, and thus create incentives to push up CAKE’s price.

PancakeSwap Price Forecast: CAKE May Continue to Recover Toward $2

PancakeSwap’s price has repeatedly failed to break the weekly resistance zone at $2.13 on Saturday, before plunging nearly 10% over the next three days. On Wednesday, CAKE saw a recovery as buying pressure returned at the $1.88 level — coinciding with the upper boundary of the sideways channel that was previously broken. As of Thursday, the token is trading stably above $1.95.

If the recovery momentum persists, CAKE’s price is likely to continue its upward extension and test the 50-day exponential moving average (EMA) around $2.06.

CAKE/USDT Daily Chart | Source: TradingView Regarding technical indicators, the RSI on the daily timeframe is currently at 45 and gradually approaching the neutral 50 level, indicating weakening selling pressure and a slowdown in bearish momentum. To confirm the bullish scenario, RSI needs to break above this neutral threshold. However, investors should remain cautious as the MACD formed a bearish crossover on Tuesday, suggesting that short-term correction risks have not been entirely eliminated.

Conversely, in a less positive scenario, if CAKE closes below the key support at $1.88 on the daily timeframe, the price could fall further and retreat to a lower support zone around $1.79.