Crypto analyst Dark Defender calls attention to a decisive correlation between Bitcoin dominance and the timing of XRP bull runs.
Data suggests that XRP typically enters its bull run phase only when Bitcoin dominance reaches a peak and then begins to decline. In his latest analysis, Dark Defender has confirmed that this pattern played out during XRP’s previous bull runs in 2017 and 2021.
Bitcoin Dominance and XRP Performance
Notably, during the early phase of the 2017 bull run, Bitcoin dominance soared to 96.25% in February 2017, putting pressure on the altcoin market, including XRP, which struggled during this period.
However, Bitcoin’s dominance began to ease in March 2017, and XRP seized the opportunity. With Bitcoin losing market share, XRP experienced a massive rally, surging by 284% that month alone.
Over the next several months, Bitcoin dominance continued to drop, with XRP soaring to reach its all-time high of $3.31 in January 2018. By then, Bitcoin dominance had plummeted to 35.41%.
However, as the dominance began to recover shortly afterward, XRP also faced a correction, ending its bull run. Interestingly, this inverse relationship between Bitcoin dominance and XRP’s performance played out again in 2021.
Specifically, by January 2021, Bitcoin dominance had spiked to 73.63%, coinciding with a low point in XRP’s price, which dipped to $0.2082. Nonetheless, Bitcoin’s dominance started to decline that same month, and XRP rebounded swiftly, closing January with a gain of over 125%.
The rally continued as Bitcoin dominance further collapsed, dropping to 49.19% by April 2021. XRP took advantage of this, climbing to a high of $1.96 in the same month despite the ongoing Ripple v. SEC legal battle at the time.
Current Conditions and What to Expect for XRP
Dark Defender’s chart suggests that Bitcoin dominance is again reaching a peak, recently achieving a level of 59.75%. Market veteran Michaël van de Poppe has also identified this spike in Bitcoin dominance.
The #Bitcoin dominance is still peaking and it's likely turning around.
If that happens in the coming weeks (due to a reversal of $ETH and bad labor market data) then this is the craziest bearish divergence I've seen in a long time. pic.twitter.com/OYvWqVwR2W
— Michaël van de Poppe (@CryptoMichNL) October 21, 2024
Meanwhile, XRP has been underperforming, persistent with the conditions at the start of previous bull runs. Market analysts believe that if Bitcoin dominance begins to fall in the coming months, it could create the ideal environment for altcoins like XRP to rally.
According to Dark Defender, the potential correction in Bitcoin dominance could occur between November 2024 and November 2025. This decline could trigger the altcoin season, as capital flows out of Bitcoin and into altcoins, leading to significant rallies across non-Bitcoin assets like XRP.
In addition to the historical patterns, the Relative Strength Index (RSI) shows that tops in the BTC.D RSI often syncs with peaks in Bitcoin dominance. These RSI tops signal overbought conditions.
Each time this pattern has occurred in the past, Bitcoin dominance has declined shortly afterward. On the current chart, the RSI is again approaching a peak. If Bitcoin dominance retraces, it could lead to a new cycle of XRP price increase.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.