The Spell Token price has crashed hard in the past few weeks as investors worry about Abracadabra’s ecosystem. SPELL has crashed to a low of $0.001185, which is close to the lowest level on record. It has fallen by more than 96% from the highest level on record. Its total market cap has dropped to about $101 million.
Abracadabra is a Decentralized Finance (DeFi) project that enables people to borrow and make interest. It uses two important stablecoins that are known as Magic Internet Money (MIM) and Magic Internet Gold (MIG). MIM is a large pegged stablecoin that is valued at over $371 million. While it is pegged on the USD, MIM uses the arbitrage strategy to ensure that it remains at or near $1.
Abracadabra has been in a strong downward trend for several reasons. First, it declined after Andrew Kronje resigned. He was one of the most pivotal persons in Frog Nation, one of the industry’s leading players. Second, the recent crash of Terra’s ecosystem has pushed more people away from the network. Finally, there are also concerns about algorithmic stablecoins like MIM.
According to DeFi Llama, the total value locked (TVL) has dropped from more than $6.4 billion in February to about $626 million. This means that the ecosystem growth will likely continue weakening in the coming months. Its TVL has dropped at a faster pace than other platforms like Uniswap and AAVE.
The four-hour chart shows that the SPELL price has been moving sideways in the past few days. The coin is consolidating along the 25-period and 50-period moving averages, while the Average True Range (ATR) has also moved to the lowest level on record. As a result, the price is below the descending trendline shown in black.
Therefore, the coin will likely continue falling in the coming weeks unless something remarkable happens. The next key support level to watch will be at $0.00100. A move above the resistance at $0.0012 will invalidate this view.
This post was last modified on %s = human-readable time difference 09:16