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Cryptocurrency Performance: XRP, ADA See High Losses; Bitcoin Stable as "Buy the Dip" Mentions Fade

Aug 22, 2023 at 02:41 pm

Bitcoin and Ether maintained their stability in the past 24 hours, according to CoinGecko data, as market conditions lacked substantial driving forces.

XRP and Cardano (ADA) faced a second consecutive day of price decline, possibly due to traders showing caution towards riskier alternative cryptocurrencies. No major tokens saw gains, and both XRP and ADA experienced drops of up to 3%.

Despite Cardano's on-chain data analytics tool Santiment reporting the highest development activity among all networks in the past month, surpassing Polkadot and Kusama, ADA prices still saw losses. Additionally, Binance Coin (BNB) faced a 1.2% decrease amid concerns about significant liquidation on the Venus Protocol, a lending and borrowing platform built on the BNB Chain.

Bitcoin and Ether continued their relatively stable performance over the past 24 hours, with limited catalysts influencing market movements. In contrast, broader equity markets and indexes extended gains, with Nasdaq futures indicating further progress in U.S. tech shares after a previous rally.

The surge in "buy the dip" mentions on social media platforms, which signifies traders looking to purchase discounted assets relative to fundamentals, seemed to level off as prices remained largely unchanged. Santiment noted this change, stating that while there was considerable optimism for a swift market recovery, such sentiment dwindled in recent days.

Santiment collected data from Reddit, X, Telegram, and 4Chan for this insight. The reduction in "buy the dip" mentions indicated a decline in trader confidence about a rapid market rebound and a resurgence of pessimism as market capitalizations weakened.

Professional traders, however, were likely resorting to sophisticated instruments like futures and options to generate returns. Bitfinex analysts shared with CoinDesk that data suggested the extensive deployment of long volatility strategies over the weekend following the price drop below $25,000. In volatile times, options strategies such as straddles or strangles might be utilized to capitalize on continued high volatility.

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