XRP Bulls on the Brink: Is a Bloodbath Coming?
XRP has seen a sharp decline of nearly 18% after hitting a yearly high on December 3. Despite this drop, traders remain hopeful for a recovery. However, analysts warn of potential risks if Bitcoin's dominance continues to rise.
XRP's Recent Price Drop: Setback or Opportunity?
After reaching a peak of $2.85 on December 3, XRP fell to around $2.37, a nearly 18% decrease. While this setback is concerning, many investors are still optimistic about a rebound.
Bitcoin Dominance: A Risk for XRP
Pav Hundal, lead analyst at crypto exchange Swyftx, warns that rising Bitcoin dominance could harm XRP bulls. If Bitcoin dominance increases again, a shift from altcoins like XRP to Bitcoin could result in a "bloodbath" of liquidations.
Currently, Bitcoin dominance is at 55.3%, down 5% from the previous week. Some speculate it could rise to 60%-70% before capital starts flowing back into altcoins.
Growing Interest in Leveraged XRP Positions
Despite XRP's price drop, there's an increasing interest in leveraged long positions. Hundal notes that open interest in XRP contracts has nearly doubled since 2021. Even as prices dip, traders continue to increase their long positions, signaling a potentially risky sense of market "euphoria."
Risk of Liquidations
The risk for XRP traders is significant. A further 7% drop in price to $2.18 could wipe out $104.4 million in long positions. For traders holding leveraged positions, this could result in severe losses.
A Historic Rally and the Potential for Recovery
XRP has seen remarkable growth in 2024. Most of the year, XRP traded between $0.48 and $0.73. However, after Donald Trump's presidential win on November 5, XRP experienced a 431% rally, reaching $2.85 by December 3. Despite the current drop, there is still potential for a recovery.
Currently XRP Price trading at $2.29 as per Coinpedia Markets data.
For a more detailed XRP Price Prediction and insights on XRP’s next moves, check out our full analysis.
What's Next for XRP?
XRP’s future is uncertain, especially with Bitcoin's dominance continuing to play a role. If Bitcoin's dominance rises further, XRP may face more downward pressure. However, if altcoins gain momentum again, XRP could see a rebound.
XRP’s future remains volatile. While it has shown strong potential, the risks posed by Bitcoin’s dominance should not be overlooked. Traders must stay informed and manage their positions carefully to navigate the market’s fluctuations.