XRP leads by decoupling from traditional correlation with Bitcoin.
BNB faces challenges as XRP seeks to outperform in capitalization.

Over the last two months, the landscape of the cryptocurrency market has undergone substantial transformations in the correlation patterns of various assets with the market frontrunner, Bitcoin (BTC). Notably, two major contenders, XRP and Binance Coin (BNB), have witnessed a significant decline in their correlation with BTC, heralding a fresh dynamic within the realm.

Insights from the market analysis tool Kaiko unveil XRP as the primary driver of this shift, marking the most substantial reduction in correlation with Bitcoin. Previously boasting a correlation exceeding 70%, XRP has seen this figure dwindle to nearly 40% over the past two months. This downturn establishes XRP as the asset displaying the highest level of autonomy in its price movements among the most prominent alternative coins.

In a parallel trajectory, BNB has encountered the second most notable decline in correlation with BTC, plummeting from 80% to 60% during the same period. This trend implies that, in the immediate term, the prices of XRP and BNB may exhibit lesser dependence on Bitcoin fluctuations compared to other cryptocurrencies.

This phenomenon underscores the significance of the evolving market dynamics. Altcoins like Avalanche (AVAX) have also witnessed a reduction in correlation, albeit not as pronounced as that of BNB. Conversely, cryptocurrencies such as ADA and ETH maintain robust correlations with BTC price shifts.

As XRP and BNB diverge in correlation with Bitcoin, the prospect emerges that XRP could surpass BNB in market capitalization. Presently, BNB holds the fourth position with a capitalization of $34.264 billion, while XRP secures the fifth spot with $32.278 billion. Despite this variance, certain members of the XRP community contend that the cryptocurrency merits the third position, excluding stablecoins, or the fourth position, inclusive of them.

In the past, XRP had already exceeded BNB in market capitalization, notably on July 13, when it reached its peak at $0.93 following a favorable ruling in the Ripple case. However, subsequent developments caused XRP to relinquish this position. The ongoing recovery efforts by XRP have now brought it back in proximity to BNB, with the margin to surpass its rival being less than $2 billion.

In order to achieve this significant milestone, XRP requires a 6.38% upswing, pushing its price from the current $0.5983 to $0.6367. Market analysts express confidence in the attainability of this objective, emphasizing the current resilience of XRP and its capacity to operate independently of the influence exerted by Bitcoin.

Changes in the correlation between cryptocurrencies, especially the disconnect of XRP and BNB from Bitcoin, are shaping new dynamics in the market. As XRP seeks to overtake BNB in market capitalization, investors are watching these moves closely, anticipating possible shifts in the hierarchy of leading cryptocurrencies.

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Filed under: Bitcoin - @ November 28, 2023 5:25 pm