In a recent episode of the CryptoLaw show, veteran market analyst Raoul Pal discussed an intriguing idea: Can XRP and other altcoins break free from the usual ups and downs linked to Bitcoin?
This insightful conversation explores the relationships between the broader crypto market, especially with XRP and Ethereum, and how they move in sync with Bitcoin’s price changes.
XRP’s link with Bitcoin
In the interview, John Deaton, founder of CryptoLaw and a pro-crypto attorney, highlighted an interesting prediction he made before a crucial July 13 ruling by Judge Analisa Torres. He foresaw XRP surging to $1 but believed it wouldn’t reach new highs until a significant bull run driven by Bitcoin.
Surprisingly, after the ruling declaring XRP a non-security, it surged to $0.93. However, these gains didn’t last, and in August, XRP retraced as it lacked support from Bitcoin and the wider market.
This occurrence underscored the continued connection between XRP and Bitcoin’s price movements. Even though XRP has shown some independence from typical cycle trends, its price remains closely tied to the overall market direction.
Will XRP Get Overshadow from Bitcoin Influence?
Further in the discussion, Deaton asked Pal if XRP and other tokens could move independently from Bitcoin’s influence. Pal responded that such a separation wouldn’t happen. He explained that the Bitcoin cycle acts as the big picture, impacting all assets in the market.
Pal traced this back to the aftermath of the 2008 financial crisis when interest rates were set to zero. This led governments worldwide to issue debt consistently over three to five years. According to Pal, this debt refinancing cycle is the key force behind the movements of Bitcoin, cryptocurrencies, and other assets.
He suggested that the combination of the four-year market cycle, economic shifts, and interest rates creates a synchronized environment. In this setup, various assets, including XRP and other altcoins, tend to move together.
Macro Cycles in Play
Pal introduced the concepts of “Macro Spring” and “Macro Summer” to break down market cycles into distinctive phases. The Macro Spring signifies the initial stages of a bull market, marked by diminishing inflation and stabilized growth. Here, Bitcoin takes the lead, mirroring the early stages of a bond market rally.
The subsequent transition into the Macro Crypto Summer indicates the onset of the alt season. Commencing with high-quality tokens, this phase gradually encompasses a wider spectrum of cryptocurrencies. Pal anticipates this transition to be in full swing, projecting a surge where “everything goes up ridiculously” by 2025.
In essence, Pal’s perspective introduces a new lens through which to view the intricate relationship between XRP and Bitcoin, urging market participants to reconsider the narrative of complete decoupling.