Bitcoin Consolidates, But XRP May Have Topped: What's Driving This Diversion?

On-chain analytics form Glassnode has highlighted an important diversion between Bitcoin (CRYPTO: BTC) and XRP (CRYPTO: XRP).

What Happened: In their latest report, the firm points out the catalyst-driven growth for Bitcoin, compared to XRP’s retail-driven speculation.

Bitcoin: Seller Exhaustion, But No Clear Trend Reversal

• Bitcoin has been in a steady downtrend, with $76,000–$85,000 emerging as a key range where reactive buying appears. The realized profit/loss ratio suggests seller exhaustion near $76,000–$80,000, but relief rallies haven’t led to sustained momentum.
• A recent "On-Chain Death Cross" signals a potential prolonged bearish phase of 3–6 months, mirroring previous cycles. Bear market characteristics—weak liquidity, negative sentiment, and increased loss-taking—are evident, though not as extreme as past bear markets.
• Around 4.7 million BTC are currently below their cost basis, but unrealized losses remain relatively moderate compared to historical downturns.

XRP: A Retail-Driven Boom and Potential Cooling-Off

• XRP's active addresses have surged +490% since 2022, far exceeding Bitcoin's 10% growth, indicating heavy retail speculation.
• The altcoin saw an explosive rally in December 2024, driven by short-term speculative flows, with its realized cap doubling from $30.1 billion to $64.2 billion. However, momentum has been fading since February, with slowing capital inflows and an increasingly fragile cost basis.
• Declining profitability metrics suggest waning confidence, making XRP holders vulnerable to downside volatility. This fragile sentiment could spill over into broader crypto markets, highlighting the risks of a retail-led, short-term speculative cycle.

Also Read: Are Bitcoin And The S&P 500 Heading For A Death Cross?

Why It Matters: Glassnode says Bitcoin's correction is meaningful in scale but has not yet reached the severity of previous bear markets.

In comparison, the more speculative assets like XRP may have seen demand peak, suggesting caution may be warranted until signs of a robust recovery start to emerge.

In another X post on Friday, Glassnode noted that Bitcoin put options are trading at a premium to calls, signaling a surge in demand for downside protection. This skew is particularly pronounced in short-term maturities, reflecting a level of fear not seen since Bitcoin was in the $20,000s in mid-2023.

Despite this heightened anxiety, Bitcoin has remained resilient, unlike equities, which sold off sharply on recent tariff headlines.

This disconnect—rising panic without a corresponding price collapse—makes the current options market setup especially noteworthy. Historically, these conditions often coincide with market bottoms.

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