XRP leads the decline in cryptocurrencies, falling by 5.2%. Are the bears in control?

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XRP has put the entire cryptocurrency market to a reality test, plummeting 5.2% in the past 24 hours, erasing gains faster than a carpet being pulled out. Other major players like Dogecoin (DOGE), Solana (SOL), Ethereum (ETH), and Binance Coin (BNB) followed closely, with declines of up to 2%. The entire cryptocurrency market also dropped by 3%.

Driven by a recovery in investor confidence, the dollar strengthened, impacting all risk assets. The global market is also not looking good, with Asian stock markets continuously declining, and U.S. stock index futures indicating more pain ahead. It seems the bears are starting to get a bit too comfortable.

Cryptocurrency crashes, market turbulence.

Friday was a bad day for the U.S. stock market. With increasing uncertainty, investors rushed to sell positions and reduce risk. The Asia-Pacific index, which had risen for five consecutive days, suddenly reversed and erased its gains. Meanwhile, the performance of U.S. index futures on Monday was equally poor.

Dow futures fell by 81 points, a drop of 0.19%, while S&P 500 futures dropped by 0.16%. The Nasdaq 100 index? It hardly moved, as if holding its breath in anticipation of the impending tragedy.

The real issue is: the dollar index (DXY), which measures the strength of the dollar against major global currencies, has been climbing. Historically, the trend of Bitcoin and other cryptocurrencies moves opposite to that of the dollar.

When the dollar strengthens, cryptocurrencies weaken. Why? A strong dollar makes traditional assets like U.S. Treasuries and stocks more attractive to investors. In contrast, cryptocurrencies feel like a risky bet you regret after 3 AM.

As the dollar soars, U.S. President-elect Donald Trump will be inaugurated in January. Whether you like him or hate him, this guy seems genuinely interested in cryptocurrencies. However, his economic policies are expected to further strengthen the dollar, leaving cryptocurrencies to fend for themselves in a hostile environment.

Click the avatar Live to watch the live stream and understand the bull market.