XRP Faces Similar Outlook as ETH Amid Profit-Taking Signs

XRP traders and investors should keep a close eye on broader market dynamics, as recent developments surrounding Ethereum (ETH) could signal similar patterns for Ripple’s native token. With ETH’s impressive rally showing early signs of cooling, caution may be warranted across other altcoins including XRP.

As trading began in Asia, Ethereum was priced above $4600, reflecting a 3% dip from the previous day. Despite this minor correction, ETH had registered remarkable gains of nearly 16% over the preceding week and 45% over the past month. These numbers, though solid, suggest that current levels may prompt some profit-taking—an environment Ripple’s XRP is likely to encounter too, particularly given the correlated movements across top cap cryptocurrencies.

What’s most telling is the ETH/BTC ratio surpassing its 365-day moving average. Historically, such a breakout has been a precursor for extended periods where Ethereum outperforms Bitcoin. A surge in spot ETH ETF inflows has amplified this trend. While XRP does not yet have the same ETF support, the attention Ethereum is drawing from institutional money hints at a rising tide that could also lift Ripple’s prospects in the medium term.

However, according to CryptoQuant reports, signals of waning momentum are emerging. Daily Ethereum deposits to exchanges have overtaken Bitcoin’s, a sign that some holders are readying to cash in on recent gains. Furthermore, ETH’s Market Value to Realized Value (MVRV) ratio against BTC has climbed from 0.4 in May to 0.8—tightening the distance to levels historically associated with overvaluation. For XRP, which often mirrors these market sentiments, a similar cautionary phase could be developing.

Feedback from trading firms aligns with this outlook. FlowDesk, a trading firm based in France, highlighted a staggering $1 billion influx into ETH ETFs in a single day. Clients showed a clear preference for ETH over Bitcoin and Solana, yet simultaneously, options trades at December $7K-$8K strikes indicated a capping of expectations—an early signal of cautious optimism rather than bullish exuberance. These types of strategies can impact correlated assets like XRP, especially as investor confidence begins to find limits.

In a recent telegram update titled “Asia Color”, QCP Capital noted that ETH’s recent gains are supported by a favorable macroeconomic backdrop, including a subdued Consumer Price Index and high hopes for a Federal Reserve rate cut in September. However, pivotal events such as Jackson Hole speeches and further CPI or Nonfarm Payroll (NFP) data could rapidly shift market sentiment. These events impact the entire digital asset space — putting XRP in a sensitive spot for near-term volatility.

Market maker Enflux expanded on this by noting that the Producer Price Index (PPI) report came in higher than forecasted. This has reminded traders of persistent inflation concerns. Such macroeconomic headwinds often lead to portfolio readjustments and asset consolidations, including in altcoins like XRP.

While demand indicators remain strong for Ethereum —such as ETF flows, increased institutional activity, and positive on-chain metrics— the phase ahead may include resistance due to extended positioning and event-driven risks. Similarly, XRP holders should assess whether its recent trading momentum is solid or overdue for correction. Learning from ETH’s current trajectory can provide valuable insight into XRP’s short-to-medium term path.

Beyond Ethereum and XRP, broader asset classes are also undergoing adjustments. Bitcoin dropped over 3%, following inflation data that painted a challenge to expected interest rate cuts. The U.S. Treasury’s statement about refraining from boosting Bitcoin reserves further dampened sentiment. Meanwhile, gold dipped by 0.62% to $3,336.6 as the dollar strengthened and yields increased. In traditional markets, Japan’s Nikkei 225 index opened higher following stronger-than-expected Q2 economic data. However, analysts caution that new U.S. tariffs could hinder Japan’s export-driven growth in the near future. U.S. equity markets also faced resistance, with the S&P 500 struggling under the weight of strong PPI data and rising volatility concerns.

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

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