The Spell Token price downward momentum gained steam on Thursday as the cryptocurrency and stock market sell-off continued. Abracadabra is trading at $0.0037, which is its lowest level on record. It has crashed by more than 90% from its all-time high, bringing its total market capitalization to more than $315 million. Its ranking has crashed from being in the top 100 of the biggest cryptocurrencies in the world to about 170. Its fully diluted market cap is $719 million.
What is Abracadabra and Spell Token?
The Decentralized Finance (DeFi) industry is one of the biggest case studies about the blockchain industry. Today, more than $100 billion is tied to the network, which is a remarkable figure since the industry was not in existence a few years ago. There are many DeFi platforms globally, with some of the biggest ones being the likes of Aave, Curve Finance, and Maker.
Abracadabra is another DeFI platform whose ecosystem helps people create the so-called Magic Internet Money (MIM) and earn interest. An individual can provide collateral in several crypto assets like yvUSDT and yvUSDC. After providing this collateral, you can borrow MIM, a stable coin that you can swap for any stable coin like Tether and USD Coin. In other words, you enter your collateral and then cash out your stablecoin.
Abracadabra was originally built using Ethereum’s blockchain. However, due to the higher costs and slow speeds associated with Ethereum, they launched the ecosystem on other chains like Arbitrum, Avalanche, and Fantom. These Ethereum-killers have faster speeds and lower costs, which help to improve the ecosystem. According to DeFi Llama, Abracadabra is the 16th biggest DeFi platform globally, with a total value of over $2.67 billion. However, in the past 30 days, this TVL has dropped by more than 25%.
Why has the SPELL price dropped?
There are several reasons why the SPELL Token price has dropped by more than 90% from its all-time high. First, and in all fairness, most DeFi tokens have seen their prices and rank decline in the past few months. For example, the Curve DAO Token price has collapsed by over 67% from its all-time high. Similarly, the Uniswap and AAVE prices have dropped by more than 70%.
The other reasons why the Abracadabra price has dropped sharply are the Federal Reserve and the ongoing crisis in Ukraine. The Fed is expected to hike rates multiple times this year and there are concerns about how risky assets will react. At the same time, the ongoing crisis in Ukraine has pushed investors to safe-haven assets like the US dollar and gold.
Spell Token price prediction
The 4H chart shows that the Spell Token price has been in a strong bearish trend and is currently at its all-time low. The coin has managed to move below the lower side of the descending triangle pattern. In price action analysis, this pattern is usually a bearish sign. It has also moved below the 25-day and 50-day moving averages. Therefore, the path of the least resistance for the pair is to the downside, with the next key support being at $0.0025. This view will be invalidated if the coin moves above the resistance at $0.004.