- Bitcoin cooled off after nearly topping $123K, with analysts saying the rally is in its early phases, not the end.
- Arca’s CIO noted that current altcoin open interest is “nowhere near” the frothy levels of previous market tops.
- XRP is trading near $2.91, approaching its all-time high resistance level of around $3.00.
Bitcoin pulled back from its session highs during US trading hours on Monday, after nearly touching the $123,000 mark earlier in the day.
Despite this slight cooling, analysts suggest that calls for a market top are premature, as the broader crypto rally appears to be in its early stages, with significant legislative developments underway in Washington DC that could provide further tailwinds.
A rally in its infancy? Gauging the market’s momentum
After a powerful surge of over 10% in less than a week, which saw some altcoins advance even more significantly, it’s natural for prices to enter a consolidation phase as traders digest the recent move and realize some profits.
Bitcoin slipped below the $120,000 level late in the US day but managed to hold onto a modest 0.6% gain over the past 24 hours.
However, other major cryptocurrencies saw more significant pullbacks, with Ethereum’s Ether (ETH) sliding back below $3,000, and Dogecoin (DOGE), Cardano’s ADA, and Stellar’s XLM declining by around 2%-3% on the day.
Among the major tokens, XRP, SUI, and Uniswap’s UNI outperformed, posting gains of 2.5%, 10%, and 6%, respectively.
Crypto-linked stocks also retraced some of their strong morning gains, though Strategy (MSTR) and Galaxy (GLXY) still closed higher by 3%-4%, while Coinbase (COIN) gained 1.5%.
Despite the consolidation, Jeff Dorman, CIO of digital asset investment firm Arca, argues that this leg of the crypto rally is more likely in its early phases than nearing its end.
In a Monday investor note, he referenced an observation from crypto analyst Will Clemente about previous major market tops, such as the March 2024 spot Bitcoin ETF-related peak and the frenzy surrounding the Trump election/inauguration in late 2024/early 2025.
During those peaks, the open interest in altcoin derivatives notably flipped that of Bitcoin, a sign of widespread speculative froth.
“The current rally is nowhere near that,” Dorman said, suggesting the market has not yet reached a state of excessive exuberance.
He also added that while trading volumes on both centralized and decentralized exchanges rose by 23% week-over-week, they still aren’t close to the levels seen during other broad-market rallies in the past.
The bigger picture: sovereign debt and institutional adoption
Looking beyond the short-term charts, some see Bitcoin’s ascent as being propelled by more fundamental, long-term factors.
Eric Demuth, CEO of the Europe-based crypto exchange Bitpanda, told TheStreet that excessive sovereign debt and investors seeking refuge from monetary inflation are key drivers.
While he stated that BTC rising to €200,000 ($233,000) is “certainly a possibility,” he emphasized that the underlying adoption of the asset carries more importance than specific price targets.
“What happens when Bitcoin becomes permanently embedded in the portfolios of major investors, in the reserves of sovereign states, and in the infrastructure of global banks?,” he posed.
Because that’s exactly what’s happening right now.
Demuth expects that in the coming years, Bitcoin’s market capitalization will gradually converge towards that of gold, which currently sits at over $22 trillion, nine times larger than BTC’s.
XRP Nears All-Time High, Breakout Looms
While Bitcoin consolidates, XRP is making headlines of its own.
The token has moved back up to a level of resistance significantly close to the $3.00 mark, a price point not seen since its all-time high.
Currently trading at $2.91, up 2.15% over the last 24 hours, XRP is fueling speculation that a major breakout could be imminent.
“XRP is screaming all-time highs,” crypto analyst Ali Martinez stated in a recent update on the social media platform X.
He pointed to a very significant technical setup, noting that XRP is now testing the top of a price channel that has been established for years, right around the $3.00 price point.
A decisive move anywhere above this psychological and technical level would likely lead to a huge rally toward the $4.80 price point, Martinez suggested.
This optimism is supported by a significant rise in open interest for XRP, which now stands at $3.409 billion, indicating increased trader participation and conviction.
Following a significant build-up of leveraged positions—a common precursor to substantial price swings—the overall sentiment for XRP is bullish.
In further support of the uptrend, the price of XRP is consistently trending above its 10-period adaptive moving average, a sign of strong underlying momentum and healthy consolidation.
The next few trading sessions will be crucial, as investors will be watching to see if XRP can successfully convert this previous resistance into a new, longer-term support level, potentially launching it into price discovery mode.
