How and why will farm auctions hold up CAKE’s value

ambcrypto.com:

PancakeSwap’s CAKE is finally leaning on the bullish side, after a heavily bearish period over the last few months. It is now overbought for the first time since April and this might translate into a big sell-off. PancakeSwap has now announced farm auctions in the first week of August, with the market continuing to show strength. Could this be a sign that CAKE will soon push towards the $5 price level?

CAKE was trading at $4.06, at press time, with the alt up by roughly 60% from its lowest price level in 2022. Curiously, it just concluded a week characterized by a lot of uncertainty. This was evident by the outflows in the first half of the week, before the return of the bulls in the second half.

The bull run turned out to be so strong that CAKE rallied by 30% in 4 days, courtesy of the sudden change in investor sentiment. However, the uptrend pushed right into the RSI’s overbought region, hence putting some psychological sell pressure on the price.

At the time of writing, it was overbought for the first time since April and this might translate into a big sell-off.

Source: TradingView

While a significant pullback might be in the works, there are multiple factors that are in favor of extended upside. Farm auctions taking place in the first week of August might drive up the demand for CAKE. Enough demand pressure from those farm auctions might encourage a delayed sell-off or encourage investors to hold on to their cryptos. This would soften CAKE’s potential drawback.

The lower range over the last few weeks demonstrated a strong price floor, but there were low volumes and a lot of indecisiveness among traders. In contrast, its performance in March was characterized by a sharp sell-off and a sharp relief rally.