Last Month's Rising Star XRP Lost Momentum Due to Strengthening US Dollar! Here are the Details

The cryptocurrency market experienced a widespread decline as the strengthening US dollar put pressure on digital assets, with XRP leading the losses on Monday.

XRP Leading the Crypto Decline Amidst Strong Dollar and Year-End Uncertainty

Token has dropped by 5% in the last 24 hours, leaving behind the drops of up to 2% in other major cryptocurrencies such as Dogecoin (DOGE), Solana (SOL), Ethereum (ETH), and BNB.

Historically, the strength of the dollar, as measured by the US Dollar Index (DXY), has led to a decrease in demand for dollar-denominated assets such as Bitcoin (BTC) and gold.

Asian stock markets also declined, reversing the five-day gains of the Asia-Pacific index. S&P 500 and Nasdaq futures contracts indicated further losses during the US trading session.

The decline occurred as investors adjusted their positions in the midst of end-of-year uncertainty. Despite a 47% increase in bitcoin prices in the last quarter, the expected 'Santa Claus rally' did not materialize and BTC prices fell by around 4% in December.

The strong dollar is linked to the diminishing expectations of further interest rate cuts by the Federal Reserve and cautious optimism regarding macroeconomic policies.

In the current environment, investors prefer traditional investments such as US Treasury bonds and stocks that provide returns in a strong dollar scenario.

Although the market is facing short-term challenges, some analysts remain optimistic about the long-term outlook for the cryptocurrency markets.

Maksym Sakharov, co-founder of WeFi, expressed his confidence in the resilience of bitcoin and altcoins despite the current consolidation. "The recorded sales are resulting from the market's knee-jerk reaction to macroeconomic policy uncertainties," he said.