The cryptocurrency market seems to be settling, yet traders are exercising caution with altcoins such as XRP, while they continue transferring funds into the leading coin, bitcoin (BTC).
XRP, which is primarily used by Ripple to streamline cross-border payments, has increased by more than 3% to $2.24 in the last 24 hours, largely fueled by optimism that the ongoing legal dispute between Ripple and the Securities and Exchange Commission (SEC) may come to a close soon.
In the midst of this price increase, the total open interest in perpetual futures on major exchanges has held steady at around 1.35 billion XRP. Additionally, the annualized funding rates and cumulative volume delta are showing negative results, as per data from Velo.
Negative funding rates indicate that short positions are incurring fees to maintain their bearish bets, highlighting the prevalence of bearish sentiment in the market. The negative cumulative volume delta, which reflects net capital inflows, suggests that selling pressure has outstripped buying pressure, potentially hinting at a bearish trend.
The current indicators raise questions about the sustainability of XRP’s price increase. At the time of writing, several other notable tokens including DOGE, SOL, SUI, HBAR, LTC, BTC, TRX, and HYPE also demonstrated negative CVDs over a 24-hour period.
Regarding DOGE, its 50-day simple moving average (SMA) is on the verge of crossing below the 200-day SMA, signaling the formation of a death cross. This concerning pattern suggests that short-term price momentum is falling behind long-term momentum, which could evolve into a significant bearish trend.
These SMA crossovers are closely monitored by trend-following traders, which means that the confirmation of the death cross could lead to increased selling pressure. However, it’s important to note that long-term SMA crossovers are lagging indicators, reflecting a sell-off that has already occurred and typically have inconsistent success in forecasting price movements in the BTC and ETH markets.
It’s worth mentioning that DOGE has already fallen by 65% since reaching over 48 cents in December.
BTC achieves highest dominance in four years
The dominance rate of bitcoin, representing its share of the total market capitalization, has climbed to 62.5%, the highest level seen since March 2021, according to TradingView data.
This figure has risen from 55% to over 62% following the crypto market capitalization surpassing $3.6 trillion in December.
This trend indicates a sustained preference for BTC, particularly during broader market downtimes.
