Crypto stocks dropped on Monday as investors took profits following a weekend rally, putting pressure on platforms like XRP and Ripple peers. The market’s momentum faded quickly after Friday’s strong gains driven by dovish Federal Reserve remarks.

Profit-Taking Follows Friday’s Surge

The start of the trading week brought a wave of selling across crypto-related equities. MARA Holdings (MARA) and Circle (CRCL) led the downward trend, shedding around 6% in early trading. Bullish (BLSH) wasn’t far behind, declining 5%, while Strategy (MSTR) dipped by 3%.

Companies with broader crypto exposure, including Coinbase (COIN), eToro (ETOR), and Robinhood (HOOD), also saw a dip in share value. The sell-off echoed a retreat across digital currencies, with Bitcoin (BTC) losing 4% and Ether (ETH) falling by roughly 5.5% compared to weekend highs.

Ripple Effect from Federal Reserve Comments

The market surge late last week was sparked by remarks from Federal Reserve Chair Jerome Powell. His comments, widely interpreted as a signal for potential rate cuts in the near term, initially buoyed investor optimism. Crypto assets rallied in step with equities as traders bet on more favorable monetary policy.

However, the relief rally proved short-lived. Despite the initial optimism, Powell’s nuanced tone failed to guarantee immediate loosening of monetary conditions. This left markets on edge heading into the new week.

Muted Movement in Broader Financial Markets

While crypto equities struggled, major U.S. indexes such as the S&P 500, Nasdaq, and Dow Jones remained mostly steady. Gold prices and the yield on the U.S. 10-year Treasury Note also showed little movement, signaling cautious investor sentiment beyond the crypto segment.

“The crypto market is grappling with macro pressures: shifting Fed signals, dollar strength, and risk reduction,” said Joel Kruger, a market strategist at LMAX, in a note. “While [Powell] hinted at rate cuts, the nuance and less dovish undertone left markets jittery.”

Key Market Watch Events Ahead

Market watchers are eyeing several upcoming economic indicators that could further influence sentiment. Nvidia’s expected earnings report, scheduled for Wednesday, is one such event that could set a tone for growth stocks and risk assets.

Following that, investors are bracing for Thursday’s release of GDP data and jobless claims, with Friday’s core Personal Consumption Expenditures (PCE) numbers to close the week. Jake Ostrovskis, an OTC trader at crypto trading firm Wintermute, emphasized these events could play a pivotal role in shaping market momentum.

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

For the crypto sector, including XRP and Ripple-aligned entities, market direction remains intricately tied to macroeconomic dynamics and investor risk appetite. Much like other risk assets, digital currencies and related equities remain sensitive to Fed signals and broader economic sentiment.