Spell (SPELL) token seems to be having a tough time witnessing profit bookings today. The token recently broke out of a corrective phase and staged a rebound when its 20-day exponential moving average (EMA) crossed its 200-day EMA.
At the time of writing, SPELL was down over 7% over the past 24 hours, trading at $0.00507 per token, with trading volume in the Abracadabra crypto down over 55% to $120 million, according to CoinMarketCap .
It is worth noting here that SPELL hit an intraday high of $0.006441 on April 3 (Sunday) with decent volumes. According to Coingecko, SPELL Crypto is up nearly 19% over the past seven days despite today’s drop. Another point that needs to be emphasized is that today’s drop comes with lower trading volume so this shouldn’t be a cause for concern.
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Now it will be interesting to see if the recent rally in SPELL tokens holds up. On November 16, 2021, SPELL hit an all-time high (ATH) of $0.07515. After listing on Binance at $0.02357 in December 2021, the SPELL token has taken a hit. This digital token is now 93% off its all-time high.
Recently, selling pressure on SPELL eased, followed by some buying. In the meantime, the token has seen enough of consolidation. At this point, however, it cannot be said that the token is over the hill. According to technical analysts, a clear bullish trend will emerge for the SPELL/USD pair if it manages to surpass the February 10th high of 0.00764.
Currently, its circulating supply is 83.9 billion tokens versus its maximum supply of 196 billion tokens and its market cap is $425 million, down 16% (over the past 24 hours) according to CoinMarketCap.
What is a magic token?
Spell Token (SPELL) is a rewards token connected to abracadabra.money, a decentralized finance (DeFi) platform specialized in lending and earning. It uses interest-bearing tokens as collateral to borrow stablecoins pegged to USD. These are also called Magic Internet Money (MIM).
Abracadabra offers isolated credit markets that allow individuals to tailor their risk tolerance to the collateral they use. It also offers yield farming opportunities where users can stake their Liquidity Provider (LP) tokens to farm SPELL. Also, users can open leveraged farming positions with borrowed MIM from their interest-bearing collateral.
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It is worth noting here that in an isolated credit market, risk is not shared collectively. Users can provide liquidity for any token and if the currency pair sees a decrease in its liquidity or something happens to the smart contract, only that pair will be affected and not the entire platform. Because of this, according to CoinMarketCap, Abracadabra is able to offer different pairs that are not supported by most other decentralized exchanges (DEXs).
SPELL is also used as a governance token. Here the voting power of the users depends on the amount of SPELL they wagered. On March 22, 2021, the SPELL token experienced a small pullback after the release of its 8th improvement protocol. This upgrade should improve the Abracadabra’s charge distribution.
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