After hitting its annual high on December 3, XRP is now down around 18%, but traders are still expecting a strong recovery. Cryptocurrency analyst kept his opinion that traders’ optimism can be tested if Bitcoin’s dominance continues to increase.
Paav Hundal, an analyst from cryptocurrency exchange Swyftx, stated that the real threat in the current scenario for high-leverage XRP bulls is that Bitcoin’s dominance is on the rise again.
He added that switching from XRP to Bitcoin could lead to a bloodbath of liquidation. Data from Coin Market Cap reveals that Bitcoin’s market capitalization is $1.94 trillion with a price hovering around $98,278 at the time of writing.
Some traders speculate that Bitcoin’s dominance could rise to the 60% to 70% range before the capital cycle begins in altcoins. The analyst stated that we have seen many quick purchases by retail over the past few weeks and that open interest is now close to doubling the levels we saw in 2021 by two.
The market also seems to have built a thirst for long exposure to XRP with leverage. I was looking for XRP loaded for a long time even if prices fell. At the time of writing, the price of XRP was hovering around $2.25 and fell 5.76% in the last 24 hours.
The analyst revealed that it is starting to appear that the market may be close to the euphoria zone. For the majority of this year, the price of XRP has been in a narrow range starting from $0.48 to $0.73. We saw a change after the election result on November 5 when Donald Trump was declared the new president. The result led to a significant rise of 431% and the price of the XRP reached $2.85 on December 3.
XRP Makes Strong Gains Despite Recent Price Decline
Crypto investors are still enjoying XRP’s recent gains from Ripple, a cryptocurrency that has the potential to reshape global payments. This is despite a 5% price correction last day.
The recent rise in the cryptocurrency market and optimism about crypto-friendly regulations may be among the factors that have pushed XRP to high price levels not seen in seven years. The price remains high on monthly and yearly charts and all the time.
Last month, XRP rose by a staggering 330%, to $2.85. Amid positive sentiment, XRP now ranks fourth among the largest cryptocurrencies with a market capitalization of $130 billion. However, trading volumes fell last day by 47% to $13 billion, and digital assets lost some of their gains.
Sales of unregistered securities. However, a landmark ruling was made in 2023, in which the court declared that XRP was not a security when sold to the public, significantly reducing regulatory pressures.
However, the judge awarded the SEC a partial victory after declaring that selling $728.9 million in XRP tokens to hedge funds and other high-end institutions was equivalent to offering unregistered securities.
The court later ordered Ripple to pay $125 million in civil fines and imposed an injunction against future violations of securities laws. This was a relief for the company as the SEC had previously sought $1 billion in redemption and advance judgment interest and $900 million in civil fines.
Although Ripple faced a $125 million penalty, the decision sparked investor confidence. In addition to the momentum, Donald Trump’s victory in the recent presidential election on a pro-cryptocurrency platform energized the market.
Ripple and Tron gains fall as altcoins market correction
Both Ripple and Tron recorded weekly gains of more than 50%, and altcoins may continue to make further gains during the altcoin season. With Bitcoin falling below $100,000, this correction pulled the market and contributed to the decline of altcoins on Friday.
Despite the decline of XRP and Tron, by 1.36% and 3.77%, respectively, technical and series indicators indicate that Tron may recover and continue its rise next week.
Bitcoin hit a new historical high above $100,000, at $104,088, driven by institutional capital flows to bitcoin ETFs and pro-crypto developments in the US. But the larger cryptocurrency saw a 6% decline after this increase, affecting altcoins that lost between 1 and 5% of their value in the past 24 hours.
The Blockchain Center Alt Season Index refers to it as the “altcoin month”. The altcoin season continues as 75% of the top 50 altcoins continue to outperform Bitcoin over a 90-day time period. The index reads 86 on a scale from 0 to 100.
XRP and TRON made gains of almost 50% in the weekly timeframe, according to TradingView data. Altcoins could extend their gains as the altcoin season continues.
Tether (USDT) dominance is 3.91%, which means that traders are more likely to shift their capital from stablecoins to cryptocurrencies and altcoins. USDT’s dominance has been on a downtrend since September 2024.
Traders need to keep a close eye on the USDT dominance chart for signs of a trend reversal or consolidation. If USDT’s dominance starts to rise again, it could indicate an increase in profit-taking or capital inflows from Bitcoin and altcoins.
