With the recent slowdown in the rise of Bitcoin (BTC) and XRP, some investors are becoming anxious about this decline, while others are anticipating a strong recovery.
An analyst who is evaluating the state of Bitcoin and XRP has cautioned about a potential bloodbath in XRP as Bitcoin dominance continues to increase.
Pav Hundal, the chief analyst at cryptocurrency exchange Swyftx, has observed that if Bitcoin dominance keeps growing, XRP could experience a decline, leading to the liquidation of a majority of long positions in XRP.
“The real danger for XRP bulls, who are currently heavily leveraged, lies in a return to Bitcoin dominance. A shift from XRP to Bitcoin would likely result in a long liquidation bloodbath.”
Acknowledging that investors’ expectations for an upward movement have risen following the remarkable surge in XRP, the analyst stated that investors are still willing to hold long positions even as the XRP price falls.
Referring to CoinGlass data, the analyst highlighted that XRP’s open interest (OI) reached $3.44 billion on December 5, emphasizing that this figure is significantly higher than the $2 billion recorded during the price surge in April 2021.
Lastly, the analyst predicted that spot volumes and prices for XRP and other alternative coins could rise once Bitcoin stabilizes and its dominance diminishes.
*This should not be considered as investment advice.