PancakeSwap’s launch on Zksync Era proves to be a match made in DeFi heaven
- PancakeSwap sees strong uptick on Zksync Period in simply 2 months
- To catch the falling knife or not? Our tackle whether or not to purchase CAKE.
It’s been roughly two months since PancakeSwap V3 rolled out on Zksync Period. Preliminary information already reveals that the launch and subsequent operations have to date been fairly profitable.
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PancakeSwap’s newest replace reveals the extent of that success. In response to the replace, PancakeSwap V3 just lately surpassed $850 million in buying and selling quantity. An indication of wholesome uptick throughout the brief interval since its launch on Zksync Period. This alerts that the DEX has been experiencing wholesome uptick since then regardless of the not so favorable market circumstances.
🥞 PancakeSwap v3 on @zksync Period has crossed over 850m in buying and selling quantity within the first 2 months since launch 🎉
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— PancakeSwap🥞Everybody’s Favourite DEX (@PancakeSwap) October 13, 2023
PancakeSwap’s rising quantity is according to deal with exercise. The variety of energetic addresses on Uniswap V3 has been rising within the final 3 months based on Glassnode. This confirms that the DEX has been dealing with extra exercise inside that interval.
Supply: Glassnode
So, what are the important thing driving forces behind this spectacular adoption? Nicely, Zksync Period has been experiencing strong uptick as one of many first Ethereum layer 2 options to supply ZK know-how. In consequence, the demand for this layer 2 has been rising. The PancakeSwap DEX was among the many first decentralized exchanges to help Zksync Period therefore it was capable of faucet into the rising utility.
Along with the help, PancakeSwap has been providing incentives which have facilitated the uptick. A few of these incentives embrace low swap charges, in addition to wholesome returns for liquidity suppliers to encourage participation.
Will the surge in buying and selling quantity influence CAKE’s demand?
The rising PancakeSwap volumes underscore the necessity for liquidity which suggests there may be natural demand for cake from Liquidity suppliers. Nonetheless, that sort of demand usually pales compared to buying and selling/speculative demand within the spot and derivatives market.
Talking of demand, urge for food for CAKE continues to dwindle and is as soon as once more threatening to dip into oversold territory. It’s also about to retest the identical low vary the place the value beforehand bounced again in September. A complete piece of cake exchanged palms at $1.08 on the time of writing.
Supply: TradingView
Examine CAKE’s worth prediction for 2024
CAKE’s prolonged draw back has resulted in a brand new 2023 low. This worth motion suggests declining dealer confidence which can have perpetuated the falling cake costs. The proverbial falling knife has been slicing via CAKE however is it near the underside?
It’s unclear whether or not CAKE is on the backside of its prolonged bearish pattern. Nonetheless, RSI has been attaining greater lows over the previous couple of months which can counsel that relative power is steadily returning.
