Analyst Shows XRP Price Rose 1,000% When Bitcoin Dominance Dropped 30% Last 2 Cycles
An analysis conducted by market watcher Dom suggests that the recent increase in the price of XRP may be just the beginning, as Bitcoin dominance plays a crucial role in determining its future path. XRP’s price has surged to $2.45 in January 2025, generating optimism among market analysts like Dom.
Bitcoin dominance refers to the proportion of Bitcoin’s market share relative to the entire cryptocurrency market. It has recently experienced a decline, dropping from 59.92% to 56.93% on December 20, 2024.
In the past, significant drops in Bitcoin dominance have triggered what is known as an “altcoin season,” during which capital flows from Bitcoin into alternative cryptocurrencies like XRP. Dom, a renowned crypto analyst, has consistently highlighted this relationship in his market assessments. He observed that during the last two market cycles, a 30% decline in Bitcoin dominance coincided with XRP price surges of over 1,000%.
However, in the current market cycle, Bitcoin dominance has only dropped by about 5%, suggesting that the biggest moves for XRP and other altcoins may still lie ahead. Despite this, XRP has already increased by nearly 500% since early November.
According to Dom, the current rally in XRP’s price could be an initial indication of a larger movement. He speculates that the current gains may be driven by new capital entering the market rather than a shift from Bitcoin to altcoins. This trend sets the stage for an even more significant rally once Bitcoin dominance experiences a more substantial decline.
XRP’s resurgence began in November 2024 when it broke above the $1 mark for the first time in three years. At that time, Dom noted that the move was unusual because it occurred without a noticeable decrease in Bitcoin dominance, which typically accompanies XRP price surges.
Interestingly, when XRP surpassed the $1 mark, Bitcoin dominance remained high at around 58%. Dom suggested that this anomaly could indicate either a temporary price movement or the early stages of a broader market rally.
As Bitcoin dominance continues to gradually decline, market participants are becoming more optimistic about the onset of altcoin season. Altcoin seasons are characterized by Bitcoin’s relative underperformance and the inflow of capital into other cryptocurrencies.
Prominent market veteran Michaël van de Poppe has consistently emphasized the imminent arrival of the altcoin season. He attributes the recent strength in the altcoin market to the fading of fear, uncertainty, and doubt (FUD) surrounding regulatory issues concerning USDT and MiCA.
Van de Poppe describes the current market phase as the beginning of a new crypto bull cycle, emphasizing the potential for exceptional returns, particularly for altcoins like XRP, which have endured an extended bear market. Currently, XRP is trading at $2.47, marking a 15% increase over the past week.