XRP by Ripple Experiences Market Downturn as Bitcoin Rebounds from $112K Slump: Weekend Monitoring
Cryptocurrency markets are currently trading in a state of indecisiveness, with many altcoins such as Ethereum (ETH) and Solana (SOL) showing signs of volatility.
The US Federal Reserve's decision not to lower key interest rates has had a significant impact on Bitcoin's price, causing it to dip to $116,000 on Wednesday evening. This drop occurred amid political turmoil and global economic uncertainty.
Ripple's native token has joined the adverse party, losing the coveted $2.9 support level and dumping roughly 4% to under $2.9 as of press time. However, it's worth noting that Ripple's token took yesterday's correction relatively well and remained sideways around the crucial $3 support.
Ethereum has extended its gap to $3,500 after another minor daily decline, while Solana is close to breaking below $160. Dogecoin and other altcoins have also dropped by around 1%.
Despite these dips, the total crypto market cap stands at essentially the same spot as yesterday at $3.750 trillion, having dropped by almost $250 billion since Thursday morning.
Pi Network's token has bounced off its latest all-time low registered yesterday and now sits around 4-5% above it at $0.36.
The recent correction in Bitcoin's price can be attributed to a combination of factors. A liquidity crunch amid weakening institutional demand, a typical technical retracement following a strong rally, and unfavourable macroeconomic signals that reduced risk tolerance in the market are key contributors.
For instance, the historically low supply of Bitcoin available for sale met with weakened demand as large buyers such as ETFs and institutional investors pulled back. This mismatch—low supply but even weaker demand—caused a crash in liquidity, pushing prices down.
Moreover, disappointing macroeconomic data, such as the July Non-Farm Payrolls report in the US showing only 73,000 new jobs, contributed to risk-off sentiment. Sluggish credit growth and renewed US tariff concerns also dampened investor appetite for risk assets including Bitcoin, causing additional downward pressure.
As the markets continue to fluctuate, it remains to be seen how these trends will develop in the coming days.
[1] CoinDesk (2025). Bitcoin Drops Below $112,000: What's Behind the Correction? [online] Available at: https://www.coindesk.com/business/2025/08/01/bitcoin-drops-below-112000-whats-behind-the-correction/
[2] CoinTelegraph (2025). Bitcoin Price Analysis: BTC Dips Below $115,000, What's Next? [online] Available at: https://cointelegraph.com/news/bitcoin-price-analysis-btc-dips-below-115000-whats-next
[3] Bloomberg (2025). Bitcoin Slides Below $112,000 on Weak Economic Data and Fed Decision [online] Available at: https://www.bloomberg.com/news/articles/2025-08-01/bitcoin-slides-below-112000-on-weak-economic-data-and-fed-decision
[4] Reuters (2025). Bitcoin Plunges Below $112,000 Amid Liquidity Crunch and Weak Demand [online] Available at: https://www.reuters.com/business/finance/bitcoin-plunges-below-112000-amid-liquidity-crunch-and-weak-demand-2025-08-01/
- The recent drop in Bitcoin's price to $116,000 on Wednesday evening might be linked to the US Federal Reserve's decision not to lower key interest rates, which could have reduced risk tolerance in the market.
- Despite the volatility in altcoins such as Ethereum and Solana, the total crypto market cap, including Bitcoin and altcoins, stands at approximately $3.750 trillion.
- Apart from the US Federal Reserve's decision, factors like the lack of Bitcoin liquidity due to weakening institutional demand, disappointing macroeconomic data, and renewed US tariff concerns might be responsible for Bitcoin's current price levels.
- As Ethereum extends its gap to $3,500 and Solana comes close to breaking below $160, traders and investors might need to keep a close eye on these cryptocurrencies as the markets continue to fluctuate.
