Orhan 
XRP, one of the leading altcoins in the cryptocurrency market, experienced an 18% decline following its yearly high on December 3. Despite this pullback, investors remain hopeful for a strong recovery. However, analysts warn that this optimism might face a significant test if Bitcoin’s market dominance continues to rise.
Recently, Ripple (XRP) surged to a notable peak, crossing the $2.80 mark, one of its most significant rallies in recent times. However, the South Korea crisis that rattled markets led to a sharp decline, dragging XRP down to $2.34.
Will XRP Recover?
Pav Hundal, lead analyst at Swyftx, highlighted that Bitcoin’s increasing market dominance poses a significant risk for XRP investors. Hundal stated, “If Bitcoin dominance rises again, capital rotation from XRP to Bitcoin could trigger large-scale liquidations.”
According to TradingView, Bitcoin’s market dominance currently stands at 52.49%. Speculation suggests this figure could climb to the 60-70% range before capital flows back into altcoins.
Hundal also noted a growing trend of highly leveraged long positions on XRP. CoinGlass data shows that XRP’s open interest reached $3.44 billion as of December 5, far surpassing the $2 billion level recorded in April 2021.
He added that Bitcoin’s price stabilization could boost investor confidence and lead to a resurgence in spot trading volumes. Furthermore, funding rates remain high on exchanges other than Binance. “On a one-year funding rate map, values above 50% are typically seen as signs of excessive exuberance,” he explained.
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