A piece of CAKE was recently taken off the menu, but was it enough to jack up the remaining amount? PancakeSwap disclosed that it recently burned just over 6.8 million CAKE, slightly reducing its circulating supply.
Here is AMBCrypto’s price prediction for PancakeSwap [CAKE] for 2022-2023
At the time of printing, CAKE had a circulating supply of 141.53 million coins. According to the announcement, the recent token burn has eliminated 6,814 million coins. This represented approximately 0.048% of CAKE’s circulating supply.
Coin-burning mechanisms are a great way to reduce the inflation of a coin and often have a positive price effect if enough coins are burned.
6,814,867 $CAKE just burned – that’s $31 million!
💰 Trading costs (swap and perpetual): 221k CAKE ($1 million) +22%
🔮 Forecast: 53k CAKE ($244k) -15%
🎟️ Raffle and Pottery: 39k CAKE ($179k) +51%
🔒 NFT Market, Profile and Factory: 2k CAKE ($10k) +112%
🛍 IFO: 17k CAKE ($80k) pic.twitter.com/VdCSd1Xf0t
— PancakeSwap 🥞 #BSC (@PancakeSwap) October 17, 2022
The recently burned 6.8 million CAKE coins made up less than 1% of the total supply. So it’s possible that the burned tokens won’t be enough to cause a big price impact in the grand scheme of things. However, investors may react positively to the news of the token burn in the short term.
A delight for investors
CAKE’s weighted sentiment and social dominance stats were already significantly higher before the token burning announcement.
The news may have helped maintain favorable market sentiment while boosting social dominance. CAKE’s sentiment shift seemed to have favored demand. FTX’s funding rate has improved significantly over the past two days, confirming a return of healthy demand in the derivatives market.
In terms of risks and rewards, CAKE’s four-week Sharpe ratio was 2.47 at the time of writing. This confirmed that CAKE has been leaning towards the reward side for the past four weeks. Especially for those who bought towards the end of last week, when prices fell to their lowest level since July.
CAKE also showed a healthy observation in terms of on-chain demand. Volume also registered increased activity over the past three days. This was especially true in the last 24 hours, when volumes soared to $1.14 million.
The volume may be associated with increased trading activity of the recently reported CAKE burn. However, the biggest volume peak occurred on October 15, which also happened to be mid-month. This was around the same time that CAKE’s price action was spinning.
CAKE managed to gain 12% in the past five days after bouncing back from the current October lows. It traded at $4.64 at press time.
It also helped that the market has seen some relief in the past 24 hours, reinforcing CAKE’s upside. Investors can therefore expect the current trajectory to continue, especially if conditions remain favourable.
While the short-term outlook was already favourable, CAKE could potentially tap into more value in the long term. Especially if the symbolic burns occur regularly.
This post PancakeSwap Burns 6.8 Million CAKE, But Is It Enough To Spoil the Bulls?
was published first on https://ambcrypto.com/pancakeswap-burns-6-8-million-cake-but-is-it-enough-to-keep-the-bulls-indulged/