Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
The previous day’s drama notwithstanding, PancakeSwap’s token CAKE did have a bullish outlook in late March. The rejection at the $11 area left a sour taste in the mouths of long-term investors of CAKE.
At the time of writing, the token was in the midst of a decent bounce from a level of support, following Bitcoin’s bounce from the $30k mark.
CAKE- 12 Hour Chart
Almost exactly a year ago, in early May 2021, CAKE was trading at $42 and investors eyed the $50 level with excitement. The price couldn’t push past $44.2, and the token slumped to $10. In late August, CAKE swapped hands at $29, but the bulls could drive the rally no higher, and a long-term downtrend was once more affirmed.
Once more in mid-March, the bulls seized the initiative, and CAKE rallied from $5.44 to $10.9 in April. The $10.9-$11.2 is an important zone of resistance, once that the bears simply could not touch.
In the past six weeks, the $7.5-$8 area has been hugely significant as CAKE has seen strong moves after flipping this area. As things stand, this zone is an area of supply. Moreover, the Fibonacci retracement levels showed this area to have confluence with the 38.2% retracement level at $7.51. Therefore, in the next week or two, the $6.7-$7 area and the $7.5 zone are likely to serve as bearish bastions.
The RSI descended below neutral 50 in April and dived as low as 22.2 the previous day. At the time of writing, CAKE appeared to bounce from the $5.58 support level and could revisit $6.7 and $7.5. The Awesome Oscillator was also below the zero line, to show strong bearish momentum.
On the other hand, the OBV has made an impressive move higher during the March rally, although it did trend downward in April and May. Therefore, while the sellers do have the upper hand, there is the faint possibility that this can change should bulls recapture $7.5.
The market structure flipped decisively bearish as the price fell below $7.5, and the trend dictates that one should look for selling or shorting opportunities on the crypto asset. A move above $7.5-$8 could shift this bias, but a bull trap can not be discounted as market sentiment remained fearful.
Zcash [ZEC]: Breaking down the potential effects of the current bearish structure
As the basis line (green) of the Bollinger Bands (BB) constricted the revival attempts for nearly seven weeks, Zcash [ZEC] bears pulled the altcoin down to yearly lows last week. The basis line has crippled the buyers’ ability to sustain a close near the upper band of the BB.
With the current rising wedge setup being solid, a recovery toward the $113-level could see a slowdown. At press time, ZEC traded at $103.9, down by 2.63% in the last 24 hours.
ZEC Daily Chart
Since its multi-month April highs, ZEC bears have persistently steered the price south after propelling an up-channel breakdown. On its way down, the price action underwent strong liquidations whilst the basis line of the BB constricted the bullish comebacks.
Consequently, the alt was down by nearly 67.42% (from 28 Mar) and dropped to hit its 16-month low on 12 May. After the $83-baseline posed some hurdles for the sellers, the bulls quickly provoked a short-term string of green candles. After forming a morning star candlestick pattern, the altcoin continued its oscillation in a bearish rising wedge.
A continued trajectory in the current pattern could face strong barriers in the $113-zone. This area represented a host of barriers that includes the upper fence of the Pitchfork, the 38.2% Fiboancci resistance. Any reversal from this zone could result in a breakout from the wedge and find testing grounds in the $96-zone. In an unlikely event of invalidating the strong bearish tendencies, any close above the $113-level could test the $126-level.
The Relative Strength Index depicted a gradual uptrend from its oversold lows. As far as the 41-support stood strong, the buyers still had conceivable means to stall the near-term liquidations. But with the -DI line looking north, keeping a check on the selling pressure could be a menacing task for the bulls.
In light of the confluence of multiple hurdles in the $113-zone, ZEC could see a short-term pullback. Any close below the wedge could result in a pathway to its $96-zone lows. To alter the existing narrative, the bulls have to find a spot beyond its Pitchfork and the 38.2% level.
Finally, keeping an eye on Bitcoin’s movement and the broader sentiment would be important to complement the aforementioned analysis.
Polkadot: Why DOT can be expected to lead the upcoming bull run
Polkadot’s native cryptocurrency DOT has so far managed to remain on the list of top 20 cryptocurrencies by market cap. The latest market events have forced investors to re-evaluate their portfolios in favor of digital currencies that have strong fundamentals, but does DOT fit these criteria?
Polkadot’s multi-chain approach can provide better insights into whether investors consider DOT to be worth having in their portfolio. It announced that interoperability and multi-chain as the future of blockchains are among the key areas of focus during the WEF22 conference on 16 May.
Polkadot’s ecosystem has been growing rapidly as it continues to onboard more projects through para-chain auctions. While this approach bolsters the interoperability agenda, it also boosts organic demand for DOT from projects running as parachains. The para-chain approach allows the community to support projects that align with Polkado’s values and can provide value to the ecosystem.
DOT’s price action and on-chain metrics
Although DOT is slated to leverage organic growth as the Polkadot ecosystem continues growing, it is also heavily correlated with Bitcoin. It struggled to maintain a healthy recovery after last week’s market crash in which it bottomed out at $7.30. However, it bounced back to $10.07 at the time of writing.
It seems DOT’s recovery is currently limited by low buying volumes. It is currently trading at a 58% discount from its April 2022 top. DOT’s price is also at an 82% discount from its current ATH of $55.09 which it achieved in November 2021.
DOT’s supply held by whales metric registered an uptick between 16 May and 17 May, courtesy of slight accumulation. However, the same metric recorded outflows which have so far pushed back to monthly lows. The metric shows that whales are selling and it reflects the lack of adequate buying volumes and failure to register a significant rally.
DOT’s developer metric achieved a significant uptick and is currently in its highest monthly range. The uptick is due to the recently announced Polkadot which also highlights the network’s commitment to security.
Is Cardano’s [ADA] rally probable yet? The answer might impress you
Cardano’s [ADA] price has been under a strong bearish influence, especially since dropping from the vital $1.2-resistance. After falling below the 20 EMA (red) and 50 EMA (cyan), the altcoin was on a streak of liquidations while correlating with the broader sell-offs.
Altering the overall outlook was still a long shot for the bulls while they had to find renewed buying pressure to snap the constraints of the 23.6% Fibonacci resistance. At press time, ADA traded at $0.5307, down by 3.12% in the last 24-hours.
ADA Daily Chart
Aggressive sell-offs from the $1.2-ceiling resulted in a 67.35% drop from ADA’s April highs. As a result, after falling below its Point of Control (POC, red), ADA poked its 15-month low on 12 May. On its way south, the 61.8% Fibonacci level held up well after restricting the falling wedge breakout. While hampering the bear run, buyers finally induced a few green candles but failed to support it on elevated volumes.
Over the last six days, the altcoin saw an expected bearish pennant breakout as the price action approached the 23.6% level barrier. With an overextended gap between the 20 EMA and 50 EMA, the sellers exhibited their superior edge in the current scenario.
A continued revival from its immediate support could see an anticipated hurdle in the $0.59-zone near the 23.6% level. However, without sufficient volumes, the buyers would find it difficult to challenge the resistance offered by the alt’s near-term EMAs. The buyers would now aim to lower the gap between the 20/50 EMA in the coming days.
The Relative Strength Index suggested that sellers have a clear advantage in the current market structure. The buyers needed to push the RSI above the 38-level to propel a short-term rally beyond the 23.6% level on the charts.
An inability to pick Aroon up (yellow) from the zero-mark could lead to further undesired losses. AN eventual recovery from this level would open doorways for a smoother recovery.
Looking at the current bounce-back from the $0.5-level, ADA could slam into the 23.6% level for testing its resistance. An eventual break above this level could pave a path to challenge the constraints of its near-term EMAs. But the threats along the Aroon up indicator could delay the potential of a bull run.
At last, ADA shares a high correlation with the king coin. Thus, traders/investors should keep a close watch on Bitcoin’s movement to make a profitable move.
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