Spell Token price has crashed to an all-time low. Buy the dip?
The Spell Token price has been in a strong bearish trend in the past few months. The coin’s price has crashed to an all-time low as demand wanes. It is trading at $0.0041, which is about 88% below its all-time high. Its market capitalization has waned to about $300 million.
Abracadabra challenges
Abracadabra is a leading blockchain project in the decentralized finance (DeFi) industry. The platform enables people to provide collateral and then borrow money.
It is similar to other lending projects in DeFi in that to access funds, one needs to provide collateral in the form of a stablecoin.
A key difference is that borrowers access their funds through what is known as the Magic Internet Money (MIM). This is a stablecoin that is soft-backed by the US dollar. According to CoinGecko, it has a total market capitalization of over $2.7 billion and is the 44th biggest cryptocurrency in the world.
According to DeFi Llama, Abracadabra has a total value locked (TVL) of over $2.7 billion, making it one of the biggest DeFi protocols in the world.
In the past few months, the Spell Token price has been in a deep sell-off for a number of reasons. First, there is the fact that the decentralized lending industry has gained a lot of competition in the past few months. This competition has come from products built using chains like Ethereum, Solana, and Avalanche among others.
Second, The SPELL price has fallen in line with the performance of other DeFi tokens. For example, in the past few months, the prices of key DeFi tokens like Aave, Uniswap, Maker, and Curve Finance have been in a strong bearish trend.
Third, there are concerns about the Federal Reserve. As the American economy grows, the Fed has hinted that it will deliver multiple rate hikes this year. Therefore, there are concerns about how the DeFi industry will perform in a high rate environment.
Spell Token price prediction
The daily chart below shows that the SPELL price has been in a strong bearish trend and is currently trading at the lowest level on record. The coin has moved below the 25-day and 50-day exponential moving averages (EMA). It has also found strong support at the current level.
Therefore, there is a likelihood that the Spell Token price will have a bearish breakout in the coming weeks.
