XRP is under pressure as the broader crypto market sees early signs of a bearish shift, led by a faltering Bitcoin surge and growing uncertainty across altcoins. Bitcoin briefly rebounded to $144,700 late Wednesday, but that recovery was short-lived as a key market sentiment index signaled bearishness—the first such shift since June 2023. This downturn trickled across major tokens including DOGE, SOL, and notably, XRP, though ether showed slightly more resilience in comparison.

Despite the market jitters, the CoinDesk 20 Index managed a modest 0.7% gain, while the CoinDesk 80 Index climbed 0.4% on the day. Analysts remain hopeful about Bitcoin’s and crypto’s long-term trajectory, pointing to structural policy shifts as a source of future strength. Jag Kooner, derivatives lead at Bitfinex, emphasized the potential impact of Donald Trump’s endorsement to include crypto assets in 401(k) plans. He notes this move could steer capital from speculative plays toward long-term pension-style investments, helping embed digital assets deeper within U.S. capital markets.

How Derivatives Markets Reflect Sentiment

Open interest in futures for BTC and ETH has plateaued, hovering above 700,000 BTC and 14.2 million ETH respectively. This indicates a wait-and-see attitude among investors ahead of the central banking summit at Jackson Hole. Meanwhile, LINK futures hold near peak levels; the coin’s rally to nearly $27 marked its highest value since January. However, most other top 10 cryptocurrencies—excluding BNB—witnessed a decline in futures interest over the past 24 hours.

HYPE token led the broader market in bullish sentiment, with annualized funding rates exceeding 25%, suggesting traders are taking strong long positions despite wider volatility. Bitcoin futures on CME saw their recent gains stall, with the three-month premium retracting to about 7%. In contrast, open interest for ether futures continued to climb, nearing the 2 million ETH threshold, a signal of growing institutional preference for Ethereum over Bitcoin.

Additionally, Deribit options showed a pronounced tilt toward Bitcoin puts, with the 180-day skew dropping to -0.42—the sharpest demand for downside protection since June 2023. Ethereum options showed a preference for calls over longer durations, portraying a more bullish outlook for ETH.

On the over-the-counter front, OTC desk Paradigm noted consistent demand for BTC puts, often financed through the sale of calls. Volatility expectations have held steady: Volmex’s seven-day implied volatility indices sat around 36% for Bitcoin and 70% for Ethereum, indicating traders don’t foresee a dramatic spike in price moves around the upcoming Jackson Hole meeting.

Speculation Around YZY Token Launch

A new memecoin dubbed YZY Money—based on Ye (formerly known as Kanye West)—debuted on the Solana blockchain, spiking over 6,800% on launch before crashing below $1. The dramatic spike and fall played out amid speculation over the authenticity of a video shared via Ye’s X account, which was initially thought to be a hack but appeared to confirm involvement. Some observers continue to question whether AI-generated content was involved.

The token’s allocation drew scrutiny: 70% was assigned to Ye, 10% placed in liquidity, and 20% offered for public sale. Leaks suggest Ye initially demanded an 80% share before settling at 70%. Analysis of wallet activity suggests early insiders reaped enormous gains. One wallet purchased $450,611 worth of YZY at $0.35 and sold a portion for $1.39 million, locking in a profit of $1.5 million when remaining holdings are included. Another invested over $2 million and currently holds $6 million in unrealized gains.

Many of these profits came at the expense of retail traders. In one example, a wallet lost nearly $500,000 after buying at $1.56 and selling just hours later at $1.06. The structure—reminiscent of Argentina’s controversial LIBRA token—allowed liquidity to be seeded with only YZY, enabling major holders to extract value unhindered. These mechanics have drawn criticism for prioritizing insider gain over community equity, even as the token’s market cap briefly neared $3 billion.

A visual chart illustrating the extreme price volatility of YZY Money during launch day.

Wormhole Challenges LayerZero Over Stargate Takeover

In broader DeFi developments, Wormhole has pushed back against LayerZero’s proposed $110 million acquisition of Stargate. The challenge includes a request to delay Stargate’s governance vote for five days to allow thorough due diligence and competitive assessment. Stargate processed over $4 billion in transactions during July and currently holds $345 million in assets. Its treasury includes $92 million in stablecoins and ether, along with $55 million in STG and other assets.

Critics of LayerZero’s bid argue it would transfer Stargate’s entire treasury and ongoing revenue to the acquirer, undervaluing the protocol and diminishing long-term value for token holders. Wormhole counters with a promise of better long-term upside, proposing a merger that could significantly expand cross-chain liquidity by integrating Stargate’s pools with Wormhole’s blockchain connections. According to the Wormhole Foundation, the synergy from such a merger would benefit holders of both STG and Wormhole tokens through increased utility and unlocked value.

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

In an evolving market where speculative tokens and DeFi power plays coexist, XRP and its peers face both technical challenges and systemic shifts. The sentiment surrounding major tokens will continue to be shaped by macroeconomic guidance from Jackson Hole and internal network developments across Ethereum and Ripple’s XRPL.