The cryptocurrency market presented a tale of two trends over the last 48 hours, with major assets like Bitcoin and Ethereum extending their losses on August 3, while payment-focused tokens XRP and Stellar (XLM) steadied on August 4, buoyed by encouraging derivatives data that signaled waning bearish sentiment.
Bitcoin, Ethereum, XRP slide on risk aversion
On August 3, Bitcoin, Ethereum, and XRP all suffered declines as risk-averse sentiment swept through markets, triggered by concerns over global economic uncertainty, potential interest rate hikes, and profit-taking after recent rallies. Bitcoin slipped below its 50-day moving average, testing key support levels; technical analysts warned that a failure to hold that zone could open the door to a deeper retracement. Ethereum underperformed, with the ETH/BTC pair hitting multi-month lows, while XRP dropped amid ongoing legal developments in the Ripple vs. SEC case.
XRP and XLM find a floor
By the next day, XRP and XLM showed resilience. XRP traded near $0.62 and XLM around $0.11, both largely flat. Derivatives data painted a more optimistic picture: XRP’s put/call ratio fell to 0.85 from 1.1 earlier in the week, signaling that options traders increasingly favored calls over puts. Funding rates turned slightly positive, indicating long positions were no longer being penalized. XLM’s funding rate stabilized at 0.01% after a prolonged negative spell, and short interest dropped markedly. Analysts attributed the shift in part to optimism surrounding the Ripple case, but cautioned that macroeconomic factors—including upcoming Federal Reserve decisions—still loom large.
Outlook
While the stabilization offers hope for a potential short-term bottom in XRP and XLM, the broader market remains under pressure. Bitcoin and Ethereum continue to test support levels, and any broad recovery is likely to be gradual unless risk appetite returns across asset classes. Traders are advised to watch key support levels and monitor derivatives positioning for further signals.
