XRP Wild Ride: Traders Brace as Bitcoin Dominance Looms Over Market

XRP has tumbled nearly 18% since hitting its yearly high on December 3, leaving traders cautiously optimistic about a rebound. However, market sentiment remains fragile as Bitcoin dominance threatens to overshadow altcoin rallies. Pav Hundal, lead analyst at Swyftx, warned that if Bitcoin dominance rises further, XRP bulls could face severe liquidation pressures. “The real danger right now for highly leveraged XRP bulls is that Bitcoin dominance increases again,” said Hundal. “A rotation from XRP to Bitcoin would very likely lead to a bloodbath of liquidations.” At the time of writing, Bitcoin’s market dominance stood at 55.30%, marking a 5% drop over the past week. Analysts speculate this figure could climb to the 60%-70% range before capital flows back into altcoins. XRP Long Positions Hundal noted a surge in leveraged long positions on XRP, indicating heightened market risk. “We’ve seen quick twitch buying by retail over the last few weeks, with open interest now almost double the levels observed in 2021,” he explained. XRP’s price, currently at $2.37, faces a precarious situation. A retracement to $2.18 would erase $104.4 million in long positions, underscoring the potential for sharp liquidations. Since Donald Trump’s U.S. presidential win on November 5, XRP has skyrocketed by 431%, peaking at $2.85 on December 3. However, its massive rise has brought concerns of a market approaching “euphoria territory,” according to Hundal. XRP’s open interest stood at $3.44 billion as of December 5, significantly higher than the $2 billion recorded in April 2021. The XRP/BTC ratio has also climbed to 0.00002375, reflecting a 47.6% increase over the past month. Bitcoin Stability Could Offer Relief Market stability remains a focal point as Bitcoin’s performance could either stabilize nerves or exacerbate volatility. Hundal suggested that Bitcoin maintaining its current levels might encourage renewed interest in spot trading volumes. “The funding rates on Binance are not overheating, but they’re quite warm across other exchanges,” he observed. “Anything exceeding 50% on the one-year funding rate heatmap is generally viewed as exuberant.” Despite its recent downturn, XRP’s robust rally earlier highlights its appeal among traders. However, the road ahead will likely depend on Bitcoin’s dominance and broader market sentiment. The post XRP Wild Ride: Traders Brace as Bitcoin Dominance Looms Over Market appeared first on TheCoinrise.com .

Source: The Coin Rise