Several crypto assets have seen a tremendous price increase this past week. These are more surprising than others, as not many people expected the SPELL token to gain over 71%. Now is an excellent time to figure out what the token is about and whether its price can keep going up.
An Introduction To SPELL
The SPELL token is part of the Abracadabra.money decentralized finance initiative. The project positions itself as a spellbook to let users produce magic internet money. Users can provide collateral through interest-bearing assets, including yvYFI, yvUSDT, xSUSHI, and others. These assets provide borrowing exposure to Magic Internet Money (MIM), a stablecoin that provides tremendous liquidity.
SPELL token is the secondary token of this ecosystem and it can be staked to earn sSPELL, which unlock governance rights and other rewards. The SPELL token resides on the Ethereum blockchain. The exposure to passive income comes from trading fees generated by the Abracadabra.money platform. 75% Of every transaction fee is distributed to sSPELL holders.
While this concept holds much merit, it remains to be seen if the Abracadabra project can be successful. It is the 11th project by DeFi TVL and has over $6.1 billion in Total Value Locked. Moreover, its liquidity increased by 22.55% this week, confirming users see merit in this project. However, that success will not automatically lead to a higher SPELL value, even though the asset’s momentum is rather bullish.
Is A New All-Time High Likely?
Like other cryptocurrencies. the SPELL currency is a way removed from its all-time high. Even with this week’s prominent price momentum, the token is still down by 34.3% from its all-time high. That gap isn’t impossible to overcome, although it will not be easy either. If the momentum continues for another week or two, that situation may change.
Moreover, one has to wonder if this token can continue its momentum when Bitcoin and Ethereum resume their uptrend. Leading currencies gaining in value is usually detrimental for alternative assets, and SPELL will not be an exception. However, stranger things have happened in the crypto world, and anything is possible.
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