The spell token price has struggled to make a recovery for months and has dropped by 96 per cent since the year started. This month, the crypto is already down by 40 per cent, and despite showing signs of a small recovery in the past week, the trend is still very bearish.
What went wrong with Spell Token?
The spell token’s consistent price drop has been caused by a number of factors, some of which are beyond its control. For starters, the entire 2022 has been an aggressive bear market for the entire cryptocurrency industry. Therefore, throughout the year, the Spell token has followed the general trend of positively correlated cryptocurrencies such as Bitcoin.
Unfortunately for the Spell token, the toll of the cryptocurrency market has weighed heavily on it, resulting in a drop of more than 96 year-to-date. The current economic climate, including inflation and rising interest rates, has also played a part in the fall of Spell Token.
The Spell Token, which works hand in hand with two stable coins, Magic Internet Money (MIM) and Magic Internet Gold (MIG), has seen the cost of pegging go up with increasing Fed rates. In addition, inflation has also meant investors are unwilling to invest their money in risky projects, especially new projects such as Spell token.
The third reason is the May cryptocurrency collapse that resulted from the fall of Terra Luna and UST. The price drop spooked investors, and the current price drop may be a response to this fear. Before the collapse, Luna was over $60 billion in market cap.
However, the collapse wiped out almost everything, leaving investors with massive losses. The response was a sell-off of cryptocurrency projects that they believed were more likely to face the same challenge. Unfortunately, the Spell token was one of these cryptos.
Spell Token Price Prediction
Despite today’s bullish move that has seen the Spell token price rise by 7 per cent, my Spell price analysis remains bearish. Looking at the chart below, the past few weeks’ price action has involved a huge bearish flag formation followed by a massive drop that wipes out all the gains.
Therefore, the latest move to the upside is very likely a bearish flag, and I expect the prices to reverse to the downside. My price prediction expects the crypto to trade below the $0.00065 support level in the next few trading sessions. The current bullish move to the upside is expected to form a lower high price action formation before the next big bearish move. However, my trade will be invalidated if the current bullish trend hits the $0.00095 price level.