CAKE analysis - sales pressure from 12 month unlocked staking
In the short term CAKE is expected to drop to at least the prior support price
as it would be unusual to drop this far and not retest that price
The main driving force behind the price movement right now is large amounts of CAKE are being unlocked from 12 month staking.
About a year ago - April 2022 - Pancakeswap was offering large staking interest for 12 month staking.
The interest rate / APY was around 140% at one point but has since settled down to the current 45%-ish rate.
Due to the high APY rate, a lot of people staked their CAKE for 12 months at that time.
That was expected to reduce selling pressure and help the price move up - however for whatever reason ... the price trended down
We are now at a point 12 months later where a lot of that locked CAKE is being unlocked.
I expect people are panicing due to the price drop and dumping their unlocked CAKE and in addition if they know about what I mentioned above they will be even more panicy as they are aware that a lot of people are getting their cake back around this time.
As mentioned above - staking should help the price go up by reducing sales pressure due to coins being taken off the short term market so they can not be sold.
Unstaking does the reverse of that - putting the coins back in the holders hands market where can be sold - that adds to the sales pressure and can make the price drop.
Also - the current APY (45%) is not as exciting as the earlier (140%) so that makes re-staking less appealing than it was 12 months ago
With all of that in mind, CAKE could have a large drop from the current price.
I hope CAKE turns around soon as it has huge potential due to being an integral part of Pancakeswap exchange - however I can not recommend a buy at this time.
This is only what I think will happen in the next few weeks. After that I dont have any ideas on whether it will move up or down
Just my 2c personal opinion. I am not a qualified analyst. Do your own research etc etc
as it would be unusual to drop this far and not retest that price
The main driving force behind the price movement right now is large amounts of CAKE are being unlocked from 12 month staking.
About a year ago - April 2022 - Pancakeswap was offering large staking interest for 12 month staking.
The interest rate / APY was around 140% at one point but has since settled down to the current 45%-ish rate.
Due to the high APY rate, a lot of people staked their CAKE for 12 months at that time.
That was expected to reduce selling pressure and help the price move up - however for whatever reason ... the price trended down
We are now at a point 12 months later where a lot of that locked CAKE is being unlocked.
I expect people are panicing due to the price drop and dumping their unlocked CAKE and in addition if they know about what I mentioned above they will be even more panicy as they are aware that a lot of people are getting their cake back around this time.
As mentioned above - staking should help the price go up by reducing sales pressure due to coins being taken off the short term market so they can not be sold.
Unstaking does the reverse of that - putting the coins back in the holders hands market where can be sold - that adds to the sales pressure and can make the price drop.
Also - the current APY (45%) is not as exciting as the earlier (140%) so that makes re-staking less appealing than it was 12 months ago
With all of that in mind, CAKE could have a large drop from the current price.
I hope CAKE turns around soon as it has huge potential due to being an integral part of Pancakeswap exchange - however I can not recommend a buy at this time.
This is only what I think will happen in the next few weeks. After that I dont have any ideas on whether it will move up or down
Just my 2c personal opinion. I am not a qualified analyst. Do your own research etc etc
Comment:
ps - the blue vertical line is when I noticed Pancakeswap offering the high staking % for 12 months staking of CAKE. I dont know when that started
Trade closed: target reached