Are XRP Surges a Red Flag for Bitcoin’s Momentum?

Market observers have noticed an interesting pattern linking XRP price spikes to Bitcoin's local peaks.

Joe Weisenthal, known for co-hosting Bloomberg’s “Odd Lots” podcast, recently pointed out this curious correlation, suggesting that when XRP sees significant upward movements, it might signal a temporary top for Bitcoin.

Earlier this year, XRP experienced a dramatic surge, climbing to a record $3.40 on the Bitstamp exchange in mid-January 2024. This rally, which grabbed headlines, marked the culmination of a strong performance in the final quarter of 2024. Just days later, Bitcoin also hit a notable high, reaching $108,786 on January 20, sparking optimism throughout the crypto space.

However, the excitement was short-lived. XRP quickly lost momentum, falling by around 47% from its peak. Analysts suggest that waning enthusiasm about the SEC’s unexpectedly positive stance on cryptocurrencies, combined with reduced retail interest, played a role in the decline. Additionally, XRP’s fortunes are closely tied to Bitcoin’s, and when Bitcoin’s momentum faded, XRP followed suit.

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Bitcoin itself had shown resilience despite a severe crash in the stock market, maintaining its position above $80,000 for a while. Yet, by Sunday, selling pressure proved too strong, and the cryptocurrency dipped to approximately $76,896, according to CoinGecko data.

Amid these fluctuations, experts disagree on the broader market outlook. Ki Young Ju, CEO of CryptoQuant, believes Bitcoin is still in a bull phase, pointing to a stable market cap alongside a rising realized cap. This indicates that significant buying activity is being neutralized by ongoing selling, keeping the price level.

Meanwhile, Peter Schiff, a vocal critic of cryptocurrencies, continues to predict further declines. According to him, digital assets, including Bitcoin, lack real value, making their downfall inevitable.

As the debate rages on, the market remains divided, leaving investors to ponder whether recent movements signal the start of a new trend or just temporary noise.

Alexander Stefanov