XRP joined most other major cryptocurrencies in posting modest gains as Bitcoin continued to hover around $113,000, with traders nervously awaiting Federal Reserve Chair Jerome Powell’s highly anticipated speech at Jackson Hole. The market is bracing for signals that might point to potential rate cuts in September.

Crypto Market Awaits Federal Reserve’s Next Move

Bitcoin stabilized above $113,600 on Thursday after recovering slightly from a recent dip earlier in the week. However, investors remain cautious. All eyes are on Powell’s upcoming remarks, which could influence the central bank’s rate trajectory for the months ahead. Clear hints toward monetary easing might uplift risk assets, including digital currencies like XRP.

According to Nick Ruck, director at LVRG Research, the Fed is stuck in a tough spot: cut rates prematurely and risk sparking inflation again, or delay too long and risk stalling economic growth. “The Fed faces a difficult balancing act — cut too soon and risk reigniting inflation, wait too long and growth risks deepen,” he remarked.

Solana and Dogecoin Outperform as XRP Inches Higher

Solana (SOL) and Dogecoin (DOGE) led Thursday’s gains among top tokens, both rising by 4%. In contrast, XRP (XRP), along with Ethereum (ETH), Binance Coin (BNB), and Tron (TRX), only rose between 1% and 3% – reflecting cautious optimism ahead of the Fed’s pivot cues.

Yet, mounting inflation concerns related to tariffs, combined with weakening jobs data, have created mixed expectations in financial markets. This has kept the appetite for risk assets like crypto subdued overall, even as certain tokens like XRP maintained a positive, albeit tepid, trajectory.

Investor Sentiment Turns Bearish as Support Levels Watch

The broader market sentiment has soured. The Crypto Fear and Greed Index dropped to 44 — its lowest in nearly two months after peaking at 75 just days earlier. This steep decline mirrors Bitcoin’s range-bound behavior, which briefly dropped to $112,500 earlier in the week.

“Bitcoin fell to $112,500 in the morning, receiving temporary support when it touched the area of recent lows at the start of the month,” said Alex Kuptsikevich, chief market analyst at FxPro. He added that after prices slipped below the 50-day moving average, sales intensified — seen by many as a bearish indicator.

Kuptsikevich warned traders are watching the $108,000 support line closely. “Now, all attention is focused on whether there will be a pullback to a potentially stronger support area near $108,000. If there is no support there, a straight road to $100,000 will open,” he said. Bitcoin’s behavior is once again proving it serves as a barometer for investor mood, arguably more responsive than traditional indexes like the Nasdaq 100.

Blockchain Analytics Signal Weakness Ahead

On-chain cryptocurrency metrics further highlight unease in the market. CryptoQuant reported that short-term Bitcoin holders have begun realizing losses — a trend that hasn’t occurred since January and that previously signaled further declines.

In addition, blockchain intelligence firm Santiment noted that despite August setting new highs, trading volume has dipped compared to July. Meanwhile, a spike in retail investor activity has been observed, a mix that often precedes local market tops.

This has led some analysts to question the fundamentals driving the recent price action. Presto Research argued that Bitcoin’s latest performance may be more reflective of a weakening dollar than a true increase in actual market demand or value. “Bitcoin’s recent records may be a consequence of the dollar’s depreciation rather than a reflection of real value growth,” the report stated.

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

With macroeconomic uncertainty on high alert, market participants are tuning in closely to Powell’s address. If the chairman signals a dovish stance, a temporary rally across crypto — including XRP — could materialize. However, if policymakers remain cautious about cutting rates, Bitcoin could resume its downward trend, potentially eroding gains in XRP and other digital assets across the board.