Why is PancakeSwap rallying today?

• PancakeSwap breaks out, reclaiming $2.00 in support as investors return.
• The implementation of the tokenomics 3.0 software upgrade will allow access to staked CAKE and cake.
• PancakeSwap is shifting its focus from a 5% trading fees revenue sharing model to the CAKE token burn mechanism.
• CAKE flashes multiple buy signals in the daily timeframe, with breaks above the 100 and 200-day EMAs signaling recovery to $2.85.
• Profit-taking and the upcoming staking unlock could increase sell-side pressure, weakening CAKE’s bullish momentum.

PancakeSwap (CAKE) breaks the downtrend and surges more than 3% on the day to exchange hands at $2.00 at the time of writing on Monday. The Decentralized exchange (DEX) native token tumbled to $1.52 on April 7 as United States (US) President Donald Trump’s tariff war wreaked havoc on global markets, including crypto.

However, sentiment has improved significantly since then, with Bitcoin (BTC) crossing above $87,500, Ethereum (ETH) sitting firmly above $1,600, and Solana (SOL) in the $140 range at the time of writing. Adding strength to the bullish market wave, PancakeSwap started releasing the “CAKE Tokenomics 3.0” update on Monday, bringing a raft of changes to the network that impact staking and yield farming.

PancakeSwap implements CAKE Tokenomics 3.0

PancakeSwap price moves higher on Monday, buoyed by the much-awaited CAKE tokenomics 3.0 upgrade tailored to foster changes in the platform’s staking, revenue sharing and farm boosting features, among other things.

According to a blog post on the upgrade, users will have access to staked CAKE and veCAKE. A 1:1 basis for veCAKE to CAKE is expected for investors who staked directly through PancakeSwap. The network explained that “veCAKE is calculated based on the staking duration, so users will be able to redeem the underlying amount of CAKE.” Network users have up to six months to redeem their staked CAKE and veCAKE, from Wednesday until October 23.

As per the blog post, the upgrade will slowly retire farm boosting from position managers, syrup pools, and farming activities, starting Thursday and ending May 7. Note that rewards from yield boosting will keep accruing up to this date.

PancakeSwap will discontinue a 5% revenue share model in v3 pools on revenue sharing, redirecting the funds to the CAKE burn mechanism. This will bump the pool token burn rate from 10% to 15%. Users can find more details about the upgrades, including CAKE emission reduction, CAKE pool delegation, and the Dune burn dashboard, in the blog post, which includes actions they must take.

PancakeSwap renews bullish outlook 

PancakeSwap’s price settles above the 50-day Exponential Moving Average (EMA) indicator around $2.00 at the time of writing, riding on improving investor sentiment and the protocol upgrade. A buy signal from the Moving Average Convergence Divergence (MACD) indicator encourages buyers to buy CAKE. 

The green histograms and a potential crossing into the positive region could further cement the bulls’ presence. Moreover, the Relative Strength Index (RSI) indicator’s position above the midline and pointing upwards indicates that the trend leans more bullish than bearish.

CAKE/USDT daily chart

Traders would look for a daily close above the 50-day EMA to confirm market stability. If investors delay profit-taking activities, CAKE could capitalize on the current positive sentiment and bullish momentum to make headway above the 100-day EMA at $2.08, the 200-day EMA at $2.16, and the descending trendline before breaking out toward $2.85, a significant resistance in the first quarter. 

On the flip side, failing to sustain the price above the $2.00 immediate support would trigger immense volatility as traders rush to close positions, anticipating CAKE’s price to fall to the most recent support at $1.80 before sliding to $1.52, its lowest point in April.