The fourth largest cryptocurrency of the world by market capitalization, which is Ripple’s XRP surged in value by more than 50% surpassing $0.50 yesterday (January 31st). This was its highest single-day percentage gain since December 21, 2017.
According to CoinDesk, this sudden double digit surge in price was created by members of a Telegram-based group called Buy & Hold XRP. This group has come into existence only on last Saturday.
Techniques such as pump and dump are common in crypto world and have been practiced by many trades, specially with regard to XRP. Recent actions by the WallStreetBets, have influenced Buy & Hold XRP group for this coordinated buying attack.
This sudden surge made it possible for XRP to recover from the fall in value from $0.50 to $0.20 which happened in last December. That plunge was due to lawsuit filed against Ripple labs by the US Securities and Exchange Commission.
Will XRP continue its surge?
The Telegram group Buy and Hold XRP, have reached more than 100,00 members stating to buy XRP. Where one such member has written, “Focus on XRP, please buy and hold.” XRP is the second cryptocurrency, after Dogecoin to record significant gains in past few days.
Traders are not being optimistic about this sudden rally. Where, they do not expect short-term gains from XRP as of those seen by Dogecoin. Author of The Crypto Trader, Glen Goodman, said to Forbes in a Twitter DM that, “Buying XRP at these prices, while its future hangs in the balance, is a pure gamble.” Further elaborating he mentioned, “The WallStreetBets crowd could easily push it a lot higher, but the moment they lose interest and move on to a different target, the price is sure to collapse again.”
Commenting on this upward surge created by the Telegraph group, “Traditional Crypto-Pump groups are being copied and legitimized by WallStreetBets-style crowd-pumps, and are now turning their burning gaze from Dogecoin to XRP,” Jehan Chu, co-founder and managing partner at Hong Kong-based Kenetic Capital, have told CoinDesk.
Cryptocurrency trader and economist Alex Krüger have said to Forbes that, “I don’t expect XRP’s pump to be as big as Dogecoin’s this week, though it will end up with a blowoff.” All these responses by market experts imply that the rally XRP facing is not sustaining.
Conclusion
Making the expert opinions to be correct, XRP faced a cash by nearly 40% as February dawns. CoinTelegraph quoted this as a ‘backfire’ on new investors. Market data showed a downside acceleration where XRP bounced back to lows of $0.39.
This explains the extreme volatility of crypto assets such as XRP, by acting based on short-term stimulus would not be beneficial for traders. Therefore, it is always advisable to check for long-term market prospects before making any trading decisions. Having a close eye on the way market behave is recommended.
