 ▲ XRP and Bitcoin (BTC) |
As Bitcoin (BTC) market dominance compresses to historic levels, signaling an expansion in volatility, market attention is focusing on the potential recurrence of XRP’s explosive rallies, which historically coincided with declines in Bitcoin dominance.
According to cryptocurrency-focused outlet The Crypto Basic on February 10 (local time), Bitcoin’s market dominance has fallen by about 9%, from 65.2% in July last year to 59.3% currently, continuing a months-long downward trend. Crypto analyst Mark Brennan noted that on the weekly chart, Bitcoin dominance is showing a compression pattern where it is trapped within a narrow range, which he interpreted as a precursor to a strong breakout either upward or downward in the near term.
Technical analyst CryptoInsightUK analyzed that the Bollinger Bands on the Bitcoin dominance chart are squeezed to the tightest level in history. This unusual compression of Bollinger Bands is widely used as an indicator signaling an unprecedented level of upcoming volatility. Brennan projected that if Bitcoin dominance turns downward, capital is likely to flow into the altcoin market, significantly increasing the probability of a sharp “rip” in XRP prices.
Historical data supports this analysis. In fact, at the end of 2024, when Bitcoin dominance dropped by about 11.8% from 61.53% to 54.56%, XRP surged 490% over the same period, soaring to as high as $2.90. Brennan emphasized that XRP has consistently delivered powerful upward rallies whenever Bitcoin dominance declined, suggesting that the current dominance compression zone could represent a major opportunity for XRP investors.
While the broader digital asset market is currently under the influence of a general downtrend, Bitcoin is experiencing relatively greater weakness compared to altcoins. Bitcoin’s market capitalization remains around $1.38 trillion, roughly 35% below its peak, whereas altcoins have shown comparatively strong resilience and are expanding their market share. This dynamic is interpreted as the opening chapter of a typical altcoin season, in which liquidity exiting Bitcoin flows into major altcoins like XRP, driving explosive price increases.
XRP now stands at a critical inflection point where its fate may be determined by the direction of Bitcoin dominance. CryptoInsightUK advised investors to be fully prepared for heightened volatility in dominance metrics. As the pattern of XRP’s vertical price surges has repeated each time Bitcoin dominance trended downward, investors worldwide are closely watching shifts in Bitcoin’s market dominance and XRP’s real-time price action to see if this formula will once again play out.
*Disclaimer: This article is for investment reference only, and the publisher assumes no responsibility for any investment losses incurred based on its contents. The information should be interpreted solely for informational purposes.*