PancakeSwap (CAKE) Faces Bearish Pressure Amid Supply Cap Implementation
PancakeSwap reduced CAKE's maximum supply to 400 million tokens on February 6, 2026, through a community vote that cut the max supply by 11%, reinforcing the protocol's deflationary tokenomics strategy. However, the positive development has failed to support the token's price momentum in recent trading sessions.
Price Action and Market Sentiment
CAKE is trading below $1.26 as of February 13, 2026, extending losses by over 8% for the week, with bears targeting levels below $1.18. The token trades in a $1.20–$1.30 demand zone, with analysts eyeing a potential move toward $2.50.
Derivatives data paint a concerning picture for short-term holders. The OI-Weighted Funding Rate turned negative on Friday at -0.0086%, indicating that more traders are betting on price declines than increases, with shorts paying longs and suggesting bearish sentiment. CAKE's futures Open Interest dropped to $19.73 million, reaching levels not seen since mid-March 2025.
Deflationary Tokenomics Gains Traction
In January 2026 alone, the protocol burned 3.46 million CAKE from fees while minting only 674k, marking the 29th consecutive month of net supply reduction. The implementation of Tokenomics 3.0 in April 2025 resulted in a notable reduction in daily emissions and helped achieve a net burn of 8.19% of the total supply over the past year.
DeFi Dominance Strengthens
PancakeSwap commands 33.5% of BNB Chain's DeFi TVL as institutional RWAs surge 555%, solidifying its position as the leading decentralized exchange on the network. As of May 2025, PancakeSwap V3 had established itself as the world's leading DEX, even overtaking Uniswap in trading volume, with weekly trading volume exceeding $14 billion.
Technical Outlook
As February 2026 unfolds, CAKE remains in a tight consolidation phase, with price action coiling within a narrowing descending channel on the daily chart, suggesting the market is preparing for a directional move. The Relative Strength Index on the daily chart is at 24, within oversold territory suggesting extreme bearish momentum, while the MACD line remains below its signal line, suggesting a continuation of the downward trend.