Bitcoin is flirting with $32,000 per coin, XRP just posted a 100% intraday rally, and suddenly cryptocurrency prices are green again.
The sudden change is all part of a possible perfect storm brewing — one that leads to a dramatic recovery and new all-time highs sooner than most would expect.
“Not A Security” XRP Victory Signals Relief In Crypto
The idea that cryptocurrencies could recover at all in the recent macro environment has been scoffed at throughout 2023. Layer in the impact of the SEC putting pressure on the industry by labeling certain altcoins as securities, and few wanted to risk their money on digital coins.
But that label was just removed from XRP, and that’s all it took to double in price in just one day. XRP has since given back some of that upside, but it’s a shocking enough move to get people to start paying attention to crypto again — especially altcoins.
A rising tide also tends to lift all boats. And with Bitcoin staying buoyant above $30,000 per coin, Ethereum holding above $1,800, and the “ripple effect” happening in BTC dominance as a result of the XRP move, altcoins have already started to participate.
The dollar diving could help crypto climb | DXY on TradingView.com
The DXY And The Perfect Storm For Bitcoin
So how is this set up to be a perfect storm? Cryptocurrencies have been in oversold conditions for an extended period, and order books are thinner today than they were in 2021. It won’t take much money coming in to begin to make prices move, per XRP’s example.
Today alone, hundreds of other altcoins posted substantial gains, simply because XRP is no longer labeled a security. It caused an immediate rush into other altcoins which are at bear market lows and priced at a great value compared to 2021 ATHs.
Given the previously mentioned macro landscape, many traders remain short Bitcoin and other coins, and could soon find themselves helping to push prices higher as they’re squeezed out of positions. Others aren’t short, but are sidelined and remains reluctant to buy in. This situation could result in chasing prices higher and higher.
Finally, this perfect storm is capped off by inflation cooling, the stock market approaching ATHs, and the US Dollar weakening according to the DXY. The DXY just lost the 100-point level, which potentially sent a risk-on signal to financial markets.
Interesting timing for the $DXY to take a dive coinciding with the $XRP case outcome
Really seems like a perfect storm for crypto is upon us pic.twitter.com/rjfGp9TE4O
— Tony "The Bull" (@tonythebullBTC) July 13, 2023
With all cryptocurrencies prices in USD as their base trading pair, a perfect storm is here that could cause prices to surge unstoppably higher.