If this vote is successful, PancakeSwap’s native token may see a significant adjustment. The PancakeSwap community has put out a proposal to lower the overall supply limit of CAKE from 750 million to 450 million tokens. This proposal is now active.
With an astounding 99.47% of voters voting in favour, the market is anticipating the result. We could see a major change in CAKE’s value if the plan is accepted before the deadline of December 29 and if it takes effect on January 4, 2024.
Investors typically feel positive after a drop in supply this size because scarcity, which is a fundamental economic concept, may drive up prices. A robust ecosystem may be shown by the proposal, which shows a proactive community involved in protocol governance. Additionally, investors may stockpile CAKE ahead of the shift in anticipation of a possible price increase brought on by the increasing scarcity, as a result of the expected drop in supply.
But the saying “buy the rumour, sell the news” frequently comes true in the world of cryptocurrency. It captures the occurrence of assets seeing a price run-up leading up to a big event that is scheduled, only to have a sell-off when the event happens. It’s possible that investors have already factored in the anticipated supply shift, and the real implementation may not have the significant impact that some had anticipated.
Technical indicators such as the Moving Averages and the Relative Strength Index, which are both comfortably above the midline and suggest bullish momentum, support the price’s apparent bullish trend. This is evident when examining the current performance of CAKE.
