XRP Slumps as Cardano Gains Momentum Amid ETF Buzz

The ongoing volatility in the crypto market has left many wondering why XRP is losing steam while Cardano continues to surge. Both tokens have responded to recent developments differently, with XRP experiencing a sharp downturn and Cardano defying the broader market trend with a surprise rally. This divergence is a clear indication of how macroeconomic news and market speculation can influence token performance uniquely.

XRP, a token associated closely with Ripple, fell by 6% recently, reacting strongly to new U.S. inflation data. The July Producer Price Index (PPI) showed a bigger-than-expected rise of 0.9% month-over-month and 3.3% on an annual basis. As PPI is considered a leading indicator of inflation, the data spooked investors, decreasing expectations for short-term interest rate cuts. Lower chances of easier monetary policy typically reduce the appeal of risk assets, including cryptocurrencies. Consequently, this inflation concern triggered a widespread market drop, affecting major cryptocurrencies like Bitcoin, Ethereum, and particularly XRP.

The overall crypto market cap dipped by 3.01% to $3.99 trillion. XRP’s performance reflects more than just the reaction to inflation; it highlights a failure to maintain momentum following a strong run. Trading at $3.07 after peaking near $3.70, XRP slipped below a critical resistance level of $3.40, signaling a potential pause in its rally.

Despite this drop, XRP’s Relative Strength Index (RSI) remains at a neutral 50. This means it isn’t overbought or oversold, suggesting the decline could merely be a healthy correction. Moreover, the Average Directional Index (ADX) is at 30, supporting the notion of an ongoing uptrend. A bullish spread between the 50-day and 200-day exponential moving averages (EMAs) also continues, maintaining a macro view that XRP’s broader rally isn’t entirely over.

Key support levels for XRP are currently around $2.95 and $2.69, while resistance sits at $3.24 and the previous rejection level of $3.39. These zones will be crucial as traders assess whether today’s retreat is the start of a longer decline or just a temporary pause before another upward move.

In contrast, Cardano (ADA) is rallying—not faltering—under the same market pressures. The token surged by 3.59% to $0.909, moving against the tide of bearish sentiment in the broader crypto environment. This uptick is partly due to buzz surrounding a possible Grayscale-backed Cardano ETF. A registration that appeared on Delaware’s state website points to a potential ETF tied to Cardano, triggering speculation and fear of missing out (FOMO) that boosted ADA’s price significantly.

Though Grayscale has not confirmed the filing, this hasn’t stopped traders from buying ADA in anticipation. Technical indicators are supporting the rally. RSI sits at 69, just shy of the overbought threshold of 70, indicating strong momentum without immediate danger of a pullback. ADA’s ADX is at 27, confirming a sustained uptrend. What’s more, the coin has entered a ‘golden cross’ pattern, where the 50-day EMA rises above the 200-day EMA—a historically bullish signal.

The Squeeze Momentum Indicator, currently in an ‘off’ state, implies that the period of compression has ended and expansion, typically associated with strong moves, is underway. ADA’s breakout past its usual resistance range adds further strength to the bullish outlook, suggesting traders might soon push toward the $1.00 psychological level or even higher.

Related: XRP Price: $12M Max Pain for Bears

The relevant price levels for ADA include support at $0.86 and $0.75, while resistance lies at $1.00 and $1.20. These markers will be essential in determining whether the rally has more legs or if it’s topping out on ETF speculation alone.