XRP saw one of the sharper losses in the broader crypto market as fears grow over a potential Bitcoin pullback toward the $100,000 level. A wave of profit-taking and macroeconomic concerns have knocked major cryptocurrencies off recent highs, spurring anxiety among traders and investors.

Bitcoin (BTC) slipped below vital trend lines that had helped sustain its latest rally, dropping to $113,500 after reaching record levels. Analysts note that this decline, though measured, could signal a more significant correction if key support levels don’t hold.

According to Alex Kuptsikevich, chief market analyst at FxPro, “Bitcoin fell to $114,700, rolling back to levels seen two weeks ago and below the medium-term trend line, which is a 50-day moving average. This dynamic reinforces fears of a deeper correction, which could affect the entire crypto market, potentially triggering a deeper correction to $100,000, near the 200-day MA.”

The total cryptocurrency market valuation dropped another 0.4%, now sitting at $3.87 trillion. Analysts warn that falling below former resistance levels could accelerate sell-offs, potentially dragging the market toward a valuation of $3.6 trillion.

How XRP and Other Tokens Are Faring

Altcoins also faced downward pressure. XRP dropped 4.1% to trade at $2.89, reflecting broader uncertainty. Cardano (ADA) led losses with a steep 6.6% decline, while Dogecoin (DOGE) fell by 2.4% to $0.21. Even Ethereum (ETH), which had shown relatively strong momentum, slid 1.8% to $4,159 — more than 12% below its recent peak.

The mood has shifted rapidly across digital assets, especially following a string of new all-time highs. Renewed inflation worries have cast doubt on the possibility of quick interest rate cuts by the Federal Reserve, leading traders to reevaluate their short-term positions.

Macro Factors Create Headwinds

Joel Kruger, market strategist at LMAX Group, explained that Bitcoin is undergoing a mild correction. “Sentiment has been mostly steered lower by hotter-than-expected U.S. inflation data, which dampened expectations for near-term rate cuts from the Fed,” he said in an email update.

Ethereum has seen a parallel decline as well, largely due to liquidation of leveraged long positions. However, Kruger noted that “broader institutional interest remains resilient – evidenced by robust ETF flows and growing treasury allocations to ETH – which keeps the medium-term outlook constructive.”

Despite price action, institutional investors continue to show strong conviction in digital assets. Hedge funds and asset managers have been increasing their exposure, suggesting that confidence in crypto remains despite short-term uncertainties.

Leverage And Volatility Heighten Risk

The growing amount of leverage in derivatives markets is adding volatility to an already tense situation. According to Ryan Lee, chief analyst at Bitget, “Record levels of open interest in futures markets underscore how much leverage has built up across crypto.”

He added, “That leverage cuts both ways: it can accelerate gains if momentum continues, but it also amplifies volatility, leaving both BTC and ETH vulnerable to sharper swings on any shift in sentiment.”

Attention now shifts to Jackson Hole, where the Federal Reserve Chair will lay out upcoming monetary policy strategies. With interest rates and liquidity tightening top of mind, markets across equities, forex, and crypto are bracing for potential shocks.

Read more: Bitcoin, Stocks Hit By $400B Liquidity Drain From U.S. Treasury Account, Not Jackson Hole: Analysts

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

XRP price chart reflecting a notable decline as market sentiment shifts.