XRP, which experienced an impressive 335% gain in just one month, is now facing the threat of a significant price drop. After reaching its yearly high of $2.85 on December 3, XRP has already declined by nearly 18%.
However, crypto expert Pav Hundal has raised concerns that if Bitcoin dominance continues to increase, XRP could drop to $2. With money already starting to shift back into Bitcoin, this could lead to a large sell-off in XRP, potentially wiping out long positions.
Bitcoin Dominance Is the Real Threat
Bitcoin dominance, which is currently sitting at 55.28%, has dropped slightly this week. However, Hundal hints that if it rises to 60-70%, the market could see a big shift as investors move their money from altcoins like XRP back into Bitcoin.
XRP’s recent surge has made it a popular asset among traders, with open interest in XRP reaching new highs. This surge in leveraged positions, paired with XRP’s price retracing, could result in massive liquidations if the market continues to decline.
Hundal mentioned that XRP longs are still being added, even as prices fall, signaling that the market may be approaching a “dangerous zone.”
Meanwhile, the XRP/BTC ratio, which shows how strong XRP is compared to Bitcoin, is currently 0.00002375. This has increased by 2.7% since December 5 and by 47% over the past month. Additionally, Hundal suggests that if Bitcoin’s price becomes stable, it could calm the market and increase trading activity.
Ripple Effect of Ripple’s Delay
Adding to the uncertainty, Ripple’s recent delay in launching its RLUSD stablecoin has caused concerns among investors. This delay has led XRP to lose its position as the third-largest cryptocurrency by market cap, falling behind USDT.
XRP Bulls in Trouble?
As of now, XRP is trading at $2.37, reflecting a slight price drop seen in the last 24 hours. If the price drops just 7% more, around $104 million in XRP long positions could be wiped out.
XRP’s failure to break through the $2.50 resistance is putting even more pressure on the token, and the market cap has dropped below $134 billion.
However, the next support level for XRP is near $2.20, with a potential further decline toward $2.00 if the bearish trend continues. But if it can clear the $2.50 resistance, we could see a rise to $2.70 or even $3.00.
