XRP has recently captured attention in the cryptocurrency community, not only for its significant price surge but also due to concerns about its centralized token supply. Crypto analyst IncomeSharks has warned of a possible sharp correction to $0.60, citing XRP’s historical patterns and centralized holdings as key factors.
43% of XRP Held by Ripple Raises Concerns
IncomeSharks highlighted in a recent tweet that 43% of XRP’s total supply remains locked, with Ripple controlling 38.9 billion tokens in escrow accounts. This centralization has sparked fears among investors about potential market manipulation, drawing parallels to other tokens with highly concentrated ownership.
“Imagine if you were on a pump-and-dump cycle and saw the developer owned 43% of the supply,” IncomeSharks remarked, emphasizing how centralized token holdings often raise red flags in the crypto space.
Historical Trends Suggest a Correction
XRP’s price history has shown a pattern of sharp spikes followed by significant corrections:
In April 2021, XRP soared to nearly $2, only to lose 75% of its value within two months.
Similarly, after reaching $3.40 in 2018, XRP plunged 92%, highlighting its susceptibility to speculative trading.
Recently, XRP surged to $2.74, achieving a staggering 410% increase within a month. However, IncomeSharks’ analysis suggests a potential retracement to $0.60, nearly a 4x drop from its current price, following its historical patterns.
Pump-and-Dump Allegations
XRP has faced criticism for its frequent price volatility, with accusations of participating in pump-and-dump cycles. Ripple’s control of a large portion of XRP tokens is a significant factor fueling these concerns.
“There’s a reason why many in the crypto space don’t trust this token,” IncomeSharks noted, reflecting the skepticism among investors and analysts about XRP’s price stability.
Conclusion
While XRP’s recent price movements have been impressive, its centralized token supply and history of sharp corrections raise questions about its long-term sustainability. Investors should exercise caution, considering both the token’s speculative nature and the potential for market corrections.