Ripple's price peaked at $0.63 on February 29, limiting its February 2024 gains to 30%, but the decline in BTC dominance could see leading altcoins make more significant gains in March.
Ripple-backed XRP is poised to see significant gains in March 2024 as investors begin diverting capital into altcoin markets.
Bitcoin dominance is declining as altcoins gain traction
Bitcoin dominated crypto headlines in February with multiple price milestones and record-breaking ETF inflows. However, towards the end of the month, market trends showed that investors were increasingly focused on other crypto sectors.
TradingView's Bitcoin Dominance (BTC.D) chart expresses Bitcoin's market capitalization as a percentage of the total cryptocurrency market, providing real-time insights into stakeholders' risk appetite and investment preferences.
As Bitcoin price reached $64,000 on February 28, BTC.D was downgraded, falling from 55.2% to 54.3% at press time on March 1.
Bitcoin Dominance (BTC.D) Trends from February 28th to March 1st | Source: TradingView
As BTC price retreated towards $60,000, altcoin markets boomed during this three-day hectic period. As can be seen in the chart, BTC.D's decline coincided with a $175 billion inflow into the altcoin market, resulting in an 8.5% increase in the total crypto market cap.
If Bitcoin's loss of dominance coincides with a boom in the crypto market, it is a key indicator that altcoins are now in the foreground. This rare market dynamic shows that investor confidence is growing and they are shifting more capital into the altcoin market as the crypto bull market intensifies.
Bullish XRP traders increase leverage by 120% in 3 days
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XRP is currently trading around the $0.60 mark. To do the same, prices will need to rise another 9% to reclaim the high of $0.65 last seen on January 2nd.
Recent trends in derivatives markets show that speculative traders have increased their bullish bets on XRP since Bitcoin's dominance began to wane on February 28th.
Santiment's funding rate trend aggregates the total fees paid between holders of futures contract positions across different trading platforms and exchanges. The funding rate increased from 0.04% to 0.10% between February 27 and March 1.
Ripple (XRP) funding rate vs. price | Source: Santiment
Typically, increased levels of favorable funding rates mean holders of long XRP positions are paying record fees to short traders to keep their positions open.
The last time XRP's funding rate rose above 0.08% was in August 2023. Such sustained and persistent spikes in funding rates occur when leveraged long traders are confident that spot prices will rise in the short term and yield outsized profits.
If this bullish scenario comes true, the price of XRP could be on the verge of rising to a new high above $0.65 in 2024, in line with the rest of the altcoins in the top 10 market valuation rankings.
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