Why TRON, XRP, and Cardano just plunged 12% in a severe altcoin correction

Major alternative cryptocurrencies including TRON, XRP, and Cardano dropped by more than 12 percent against the USD on the day.

In the past two weeks, while the Bitcoin price increased by 14 percent, TRON, XRP, and Cardano surged by around 30 percent on average.

As the Bitcoin price reclaimed $10,000, which is widely considered to be a psychological level by traders, the cryptocurrency market started to rebound.

Traders started to become more confident in the bullish market structure, taking the market cap of the entire cryptocurrency market from $256 billion to $307 billion in about ten days.

In the latest bull trend the price of Ethereum started to rise first with bitcoin following the price trend of Ethereum.

Although the bitcoin price briefly surged past $10,000 on the day immediately after the opening of the CME bitcoin futures market, it demonstrated a steep sell-off right after it.

As Bitcoin struggled to hold $9,800 and corrected to the $9,600s, even major altcoins with relatively high liquidity in the likes of XRP plummeted with little to no reaction from buyers.

Due to extremely high funding rates, XRP fell by 22 percent within 24 hours, causing havoc in the market.

A funding rate on margin trading platforms like BitMEX and Binance Futures refers to a system that lets long holders or short sellers pay each other based on the state of the market.

If there are more longs in the market, long holders need to pay short-sellers a certain percentage of their position every eight hours to bring balance in the market.