Bitcoin’s dominance, a key metric that reflects its share of the total cryptocurrency market capitalization, recently saw a notable 6% drop.
Of this, XRP accounted for a significant 3% increase in its dominance. While Bitcoin dominance is now recovering, the broader implications highlight changing trends in cryptocurrency market liquidity.
CryptoQuant founder Ki Young Ju brought this observation to the public’s attention in a tweet.
Young Ju’s tweet
XRP Independent Rise
In recent weeks, XRP has become one of the few altcoins attracting new liquidity, directly contributing to the temporary decline in Bitcoin dominance. Specifically, between November 3 and December 3, the price of XRP skyrocketed by approximately 500%.
At the same time, its market capitalization multiplied by more than five, from $28.99 billion to an all-time high of $154.83 billion. This major move by XRP dealt a blow to Bitcoin’s dominance, which at one point reached 52%. Meanwhile, it is now around 60%.
Update on Bitcoin and XRP Market Dominance
XRP’s rise in market share underscores a break from traditional patterns in which altcoins closely mirrored Bitcoin’s bullish trend. Instead, XRP is forging its own narrative, driven by increased interest and independent adoption.
This trend aligns with a previous prediction from Ki Young Ju. Two weeks ago, he predicted that altcoin seasons would deviate from expectations, with only certain altcoins gaining traction due to their unique ecosystems or market dynamics.
The state of altcoin season
Despite the rise of XRP, the current market does not resemble a typical “alt season” where most altcoins outperform Bitcoin.
According to Ki Young Ju’s recent commentary, rotations from BTC to altcoins remain limited, and only a handful of altcoins, such as XRP, are attracting significant liquidity. This marks a shift from past cycles, suggesting that altcoins now require different utilities or market narratives to thrive.
This observation is further emphasized by market data showing that Bitcoin currently outperforms up to 74% of crypto assets in the top 100. With Bitcoin trading at $93,000, it boasts year-to-date growth of 1110%.
At the same time, altcoins such as Celestia (TIA), Arbitrum (ARB), Polygon (POL, formerly MATIC), Optimism (OP), and DYDX are posting staggering losses of over 50% in their year-to-date performance.
Young Ju suggested that altcoins are not seeing the traditional rotation from Bitcoin to altcoin because BTC has created a paper-based Layer 2 ecosystem through ETFs and corporate treasury allocations. This is limiting liquidity flows into altcoins.
According to Young Ju, the two potential paths for altcoins to remain relevant are to develop “paper-wrapped” versions similar to institutional Bitcoin products and to build robust ecosystems that leverage stablecoins or Bitcoin as fundamental building blocks.
