Is the Ripple (XRP) Price in Danger? Closer Look at an Important Metric

Ripple dominance, the measure of XRP’s market share by market capitalization in the competitive cryptocurrency segment, is flashing a warning signal this year.

XRP Dominance Trends Lower

XRP dominance is down 3.63% for the week, 18.83% over the past month, and 10.63% over the past six months. On the one-year window, Ripple’s percentage market share of all cryptocurrencies is down 11%. On the five-year window, it’s down 82%. Its peers on the market cap chart are faring markedly better.

Bitcoin (BTC), for example, has only lost 10.59% of its market share over the past five years, not 82% like Ripple. Meanwhile, Bitcoin’s dominance has grown by 28.65% over the past year, 6.85% over the past six months, and 1.6% over the past month. But Ethereum might make for a more useful comparison.

Ethereum (ETH) dominance has fallen over the one-month to one-year views, but not by as much as XRP dominance. Over the past month, ETH dominance only fell 3.3% compared to XRP’s 18.83% plunge. Meanwhile, taking the long-term view, Ether’s market share is up 90% over the past five years.

Here are some potential causes for receding XRP dominance over the crypto market share.

SEC Lawsuit and Declining Ripple Market Share

Over the past month, XRP dominance has declined drastically because the XRP price consolidated over the past 30 days while the Bitcoin price rallied by about 19%.

Ether’s price posted some 15% gains over that same period. Unfortunately for Ripple, a cloud of uncertainty looms as traders and investors wait for the SEC lawsuit to go to trial in four months.

One silver lining as far as XRP dominance goes is the 6-month chart, where Ripple’s 10.63% decline is actually a little better than Ether’s 12.91% decline. Over that period, Ripple Labs racked up series of big wins against the SEC in court that were reflected by markets in the XRP price.

Ripple Labs has been battling the Securities and Exchange Commission in court since Dec 2020. The resulting regulatory uncertainty has been a three-year headwind for XRP tokens. Developments in the SEC lawsuit over the next four months will likely be key factors in Ripple’s price movements and market share.