Spell Token price surged to the highest level since May 22nd even as other cryptocurrency prices dropped. The SPELL token rose to a high of $0.00170, which was the highest level since May 21st of this year. It has risen by more than 131% from its lowest point this year.
What is SPELL and why is it rising?
Spell Token is the native token for Abracadabra, decentralized finance (DeFi) platform. Abracadabra is a DeFi platform that helps people to borrow online and leverage up their tokens. It is part of the Frog Nation, a company that owns veNFT and Frog USD.
Borrowers deposit their favorite cryptocurrencies as collaterals and then borrow Magic Internet Money (MIM), a leading stablecoin. MIM is a stablecoin that has a market cap of over $221 million. At its peak, it was one of the biggest stablecoins in the industry. Abracadabra also owns Magic Internet Gold (MIG), a stablecoin that is pegged to the US dollar.
The Spell Token price has been in a strong downward trend in the past few months as demand for the coin waned. It has crashed by more than 90% also as controversies in Frog Nation have kept people away from the platform.
As a result, the total value locked in Abracadabra has crashed from an all-time high $6.7 billion to less than $500 million. This sell-off accelerated after Terra UST lost its peg in May this year. The depeg led to a sharp decline in MIM’s and MIG’s total market cap as investors worried about algorithmic stablecoins.
Therefore, the current strong performance of the Spell Token price is likely because of a short squeeze in the market. This view is supported because there is no major news in the ecosystem and the total inflows into the network have remained low.
Spell Token price prediction
The daily chart shows that the SPELL price has made a strong recovery in the past few days. The coin has formed an inverted head and shoulders pattern and moved slightly above the 25-day and 50-day moving averages..
In price action analysis, this pattern is usually a bullish sign. Therefore, the Spell token price will likely continue rising as bulls target the key resistance at $0.0025.