ICP Price on Edge as Crypto Expert Criticizes Internet Computer

The price of Internet Computer’s (ICP) token has been experiencing some volatility lately, despite recent upward movement. As of Friday, ICP was trading at $11.18, which represents a 93% increase from its 2024 low. However, it remains relatively stagnant compared to the strong rally seen in other popular cryptocurrencies like Bitcoin and Ripple, which are approaching their all-time highs.

ICP’s performance has been somewhat restrained, especially after a scathing critique of its technology by well-known crypto researcher and hedge fund manager, Justin Bons. Bons took to X (formerly Twitter) to outline a number of concerns about the Internet Computer network. His criticism centers on several key areas, which may have contributed to the token’s underperformance in recent times.

One of the first points Bons raised was the degree of centralization in Internet Computer’s network. He claims that the network is highly centralized because it depends on a maximum of 40 independent subnets, each responsible for its own security. In contrast, other blockchain networks like Avalanche and Polkadot use shared security across their subnets, which makes them more secure, according to Bons. The argument is that the lack of shared security could make the ICP network more vulnerable to attacks.

Another issue Bons highlighted is ICP’s data center security. He pointed out that Internet Computer publicly lists the locations of its nodes, which could potentially make the network more susceptible to targeted attacks. This openness, in Bons’ view, compromises the overall security of the platform.

The scalability of Internet Computer was another area of concern. Despite ICP’s claims of having infinite scalability, Bons contends that the network does indeed have limits. He argues that since all the subnets in the ICP network must communicate with one another, this creates a bottleneck that will restrict scalability in practice.

Bons also took issue with ICP’s approach to solving the oracle problem. ICP claims to have addressed this issue through HTTP outcalls, allowing smart contracts to retrieve data from Web2 APIs. However, Bons criticized this method, arguing that it relies on centralized tools, which goes against the decentralized ethos that many blockchain projects strive to uphold.

These criticisms have contributed to a lack of confidence in ICP within the broader crypto community, particularly in comparison to other blockchain platforms that have been able to achieve greater adoption and development. For instance, ICP hosts only a small number of decentralized finance (DeFi) applications, with a total value locked (TVL) of just $41 million. Additionally, the market cap of ICP’s stablecoins is only $5 million, with Tether accounting for 66% of the total supply.

ICP Price Analysis

From a technical perspective, ICP has shown some signs of a potential rebound in recent days, as most cryptocurrencies have been experiencing a market-wide recovery. The daily chart reveals that ICP formed a double-bottom pattern at $9.33, which is often considered a bullish reversal signal. This pattern consists of two low points and a neckline, which, in ICP’s case, is positioned at $12.72.

ICP has recently moved above its 200-day moving average and has also surpassed the 50% Fibonacci retracement level. Additionally, the token has broken through an ascending trendline that connects the lowest points from November of the previous year. These indicators suggest that ICP is in the process of a bullish reversal.

A confirmation of this bullish trend would come if ICP’s price moves above the neckline of the double-bottom pattern at $12.72. If the price breaks through this level, it could trigger a rally towards the next resistance level, which sits at $15.60, the token’s high from November 2024.

Despite the criticisms from Bons, ICP still has the potential for upward price movement, particularly if the broader crypto market continues to show strength. However, the ongoing concerns about its security, scalability, and limited adoption in comparison to other blockchain projects could weigh on its long-term growth.

In conclusion, while Internet Computer’s price has experienced a recent uptick, it remains in a somewhat precarious position, especially with the negative publicity surrounding its technology. Investors should be cautious and monitor the price closely to see if ICP can overcome its challenges and confirm a breakout to higher price levels.