XRP, known for its meteoric 335% gain in just one month, now confronts mounting challenges as the market signals a potential downturn. After peaking at $2.85 on December 3, the cryptocurrency has already declined by 18%, currently trading at $2.37. The latest market data raises concerns that XRP’s bullish momentum could falter further, especially as Bitcoin dominance intensifies.
Bitcoin Dominance Threatens Altcoin Stability
A key factor in XRP’s precarious position is Bitcoin’s increasing dominance, now at 55.28%. Although slightly down from its peak, crypto expert Pav Hundal warns that if Bitcoin dominance climbs to the 60-70% range, altcoins like XRP may experience significant sell-offs. Investors are already shifting funds back into Bitcoin, heightening the risk of long-position liquidations in XRP.
Hundal highlights a worrying trend: despite XRP’s recent price dip, traders continue to open long positions, signaling overconfidence. Open interest in XRP has reached unprecedented levels, making the asset vulnerable to cascading liquidations if bearish pressures persist.
Ripple’s Stablecoin Delay Adds to Uncertainty
Adding fuel to the fire, Ripple’s delay in launching its RLUSD stablecoin has sparked anxiety among XRP investors. This postponement coincides with XRP losing its spot as the third-largest cryptocurrency by market cap, now trailing behind USDT. Ripple’s delay could erode investor confidence further, limiting XRP’s ability to recover.
XRP/BTC Ratio Offers Mixed Signals
The XRP/BTC ratio, an indicator of XRP’s performance relative to Bitcoin, currently sits at 0.00002375, reflecting a 2.7% rise since December 5 and a 47% gain over the past month. This suggests that XRP is still holding ground against Bitcoin, but the broader market’s shift toward Bitcoin stability could reduce trading enthusiasm for altcoins.
What’s Next for XRP?
At $2.37, XRP struggles to maintain critical support levels, with resistance looming at $2.50. A failure to break past this resistance could trigger a further drop toward $2.20 or even $2.00, wiping out over $104 million in long positions. However, if XRP manages to rally above $2.50, it could climb to $2.70 or even revisit the $3.00 mark.
Also Read: XRP Lawsuit Showdown: Will the SEC Appeal Before the January 15 Deadline?
For now, XRP bulls face a tough battle. The interplay between Bitcoin dominance, Ripple’s strategic delays, and leveraged trading positions will likely determine the cryptocurrency’s short-term trajectory. Investors should watch key support levels closely as the market navigates these uncertain waters.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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