Spell (SPELL) crypto: Will the recent rebound sustain?

Highlight

• SPELL token witnessed some rebound last week after a prolonged period of consolidation.
• In the last 24 hours, the abracadabra crypto has fallen by more than 7% with lower volumes.
• Despite today’s fall SPELL crypto is up over 19% in the last 7 days.

Spell (SPELL) token seems to be having a rough spell today, witnessing profit booking. The token recently broke out of a corrective phase and witnessed a rebound with its 20-day exponential moving average (EMA) crossing over its 200-day EMA.

At the time of drafting, SPELL was down over 7% in the last 24 hours to trade at US$0.00507 per token with trading volume in the abracadabra crypto falling by over 55% to US$120 million, according to CoinMarketCap.

Worth mentioning here is that on 3rd April (Sunday), SPELL made an intraday high of US$0.006441 with decent volumes. According to Coingecko, SPELL crypto has gained nearly 19% in the last seven days despite today's fall. Another point that needs to be highlighted is that today's fall is accompanied with a lower trading volume, so it should not be a concern.

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Now, it will be interesting to see if the recent rally in SPELL token sustains. On 16 November 2021, SPELL made an all-time high (ATH) of US$0.07515. Following its listing on Binance at US$0.02357 in December 2021, SPELL token has taken a hammering. This digital token is now 93% off from its all-time high.

Recently, the selling pressure in SPELL eased and was followed by some buying. In the meantime, the token has witnessed enough of consolidation. However, at this stage it cannot be said that the token is out of the woods. According to technical analysts, a clear uptrend in the SPELL/USD pair will emerge if it manages to cross its 10 February high of 0.00764.

At present, its circulating supply is 83.9 billion tokens as against its maximum supply of 196 billion tokens and its marketcap is US$425 million, down 16% (in the last 24 hours), according to CoinMarketCap.

What is Spell Token?

Spell token (SPELL) is a reward token associated with abracadabra.money, a decentralised finance (DeFi) platform specialising in lending and earning. It uses interest-bearing tokens as collateral to borrow stable coins pegged to USD. These are also called Magic Internet Money (MIM).

Abracadabra provides isolated lending markets, which allow individuals to adjust their risk tolerance according 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 using borrowed MIM from their interest-bearing collateral.

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Worth mentioning here is that in an isolated lending market, the risk is not shared collectively. Users can provide liquidity for any token and if the currency pair sees reduction in its liquidity or something happens to the smart contract, only that pair is affected and not the entire platform. Due to this, Abracadabra is able to offer various pairs that are not supported by most of other decentralised exchanges (DEXs), according to CoinMarketCap.

SPELL is also used as a governance token. Here, users' voting power depends on the amount of SPELL they have staked. On 22 March 2021, SPELL token witnessed a small pullback after the release of its 8th improvement protocol. This upgrade was expected to improve the Abracadabra’s fee distribution.

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