The cryptocurrency market has entered a volatile phase, with XRP and Bitcoin (BTC) under significant pressure amid macroeconomic uncertainty and regulatory developments. XRP has faced steep declines following the withdrawal of appeals in the Ripple vs. SEC case, while BTC slipped below critical support levels, triggering broader market corrections. 

In her article, broker Jennifer Walker from Highmont Group walks readers through the key aspects of the subject.

XRP Joins Broader Crypto Market Correction

XRP has been under intense selling pressure, falling 15% since Ripple and the SEC filed a Joint Stipulation of Dismissal, which withdrew their appeals. Investors had hoped for a rapid conclusion to the SEC vs. Ripple legal battle and the approval of XRP-spot ETFs, but delays have weighed on sentiment.

In the absence of strong catalysts, XRP now mirrors the broader crypto market correction, struggling to maintain momentum above the $3 mark. Analysts point to multiple events that could influence XRP’s next breakout opportunity:

• XRP-spot ETF approvals: The SEC delayed its decision on SOL-spot ETFs until October, indirectly impacting the timeline for XRP-spot ETFs. Market participants now anticipate regulatory clarity in the coming months.
• Ripple’s US-chartered bank license: The Office of the Comptroller of the Currency (OCC) has 120 days to rule on Ripple’s banking license application, potentially providing a strong bullish catalyst if approved.
• CLARITY Act vote: With Congress in recess until September, crypto legislation remains on hold, delaying any market-friendly regulatory framework.

Despite the short-term headwinds, Ripple’s position as an alternative to SWIFT could provide longer-term support. Ripple CEO Brad Garlinghouse projects that XRP could capture up to 14% of SWIFT transactions within five years, highlighting XRP’s potential role in cross-border payments and institutional adoption.

XRP Price Outlook

XRP’s recent price action has been bearish, with a 6.56% drop on August 19 following a prior 0.88% decline, closing at $2.8619. This underperformance contrasts with the broader crypto market, which fell 3.43%, bringing the total market capitalization to $3.74 trillion.

Key near-term catalysts for XRP include:

• XRP-spot ETF headlines
• Treasury Reserve Asset adoption
• US-chartered bank license application
• SWIFT integration updates
• Legislative developments

From a technical perspective, a break above the 50-day EMA could trigger bullish momentum, targeting the psychological $3 resistance level. A sustained move above $3 may open the door to $3.10, while a breakdown below $2.8 could test the August 3 low of $2.7254, signaling further downside risk.

Bitcoin Slides Below Key Support

While XRP faced ETF-related pressures, Bitcoin (BTC) also succumbed to macro uncertainty, slipping below $115,000 support for the first time since August 5. Investor focus remains on the Federal Reserve’s monetary policy stance, particularly ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on August 22.

Recent inflation-linked US economic data has sparked volatility, with market participants weighing potential delays in interest rate cuts. Elevated borrowing costs could strengthen the US dollar, diminishing BTC’s appeal as a store of value. 

Conversely, dovish signals from the Fed could weaken the dollar, reduce borrowing costs, and support BTC and broader risk assets.

US Crypto-Spot ETF Market Outflows

Market sentiment has also been influenced by BTC-spot ETF flows, which reflect investor demand and liquidity. According to Farside Investors, the US BTC-spot ETF market recorded net outflows of $121.7 million on August 18, accelerating further on August 19.

Significant fund movements included:

• Fidelity Wise Origin Bitcoin Fund (FBTC): $246.9 million outflow
• Grayscale Bitcoin Trust (GBTC): $115.5 million outflow
• Bitwise Bitcoin ETF (BITB): $86.8 million outflow
• ARK 21Shares Bitcoin ETF (ARKB): $63.3 million outflow

Pending data for BlackRock iShares Bitcoin Trust (IBIT) could extend the total outflow streak to three sessions, highlighting the importance of ETF flows for BTC’s supply-demand dynamics and price trajectory.

BTC Price Outlook

Bitcoin closed at $112,881 on August 19, reflecting a 2.94% drop after a 1.03% loss the previous day. Key factors that could influence BTC in the near term include:

• Fed monetary policy signals: FOMC minutes, Jackson Hole commentary, and Fed Chair Powell’s speech
• US economic indicators: Services PMI and Jobless Claims
• Legislative developments: Potential passage of the CLARITY Act
• BTC-spot ETF flows

Bearish scenario: Hawkish Fed signals, ETF outflows, and rising US stagflation risks could drag BTC to $110,000, with the psychological $100,000 level under threat.

Bullish scenario: Legislative clarity, dovish Fed commentary, and strong ETF inflows could push BTC toward all-time highs near $123,731, reinforcing positive market sentiment.

Conclusion

XRP and BTC are navigating a challenging market environment, shaped by regulatory decisions, macroeconomic indicators, and ETF developments. XRP faces a critical $2.8 support test, while BTC contends with Jackson Hole-driven volatility. Investors are closely monitoring Ripple’s bank license decision, ETF approvals, and Fed commentary, which could define the next phase of crypto market trends.