The cryptocurrency market is experiencing a downturn this week, with Ripple (XRP) and Stellar (XLM) leading the charge lower. As of Thursday, XRP has dropped below $1.090, while XLM has fallen below key support levels, extending their losses for the fifth consecutive day. This decline is being fueled by a combination of factors, including renewed tensions between the US and Iran, which have dampened risk sentiment and heightened the risk of deeper corrections for these altcoins. The fragile US-Iran relationship has taken a turn for the worse, with the US military launching new strikes in response to Iran's attacks on commercial ships in the Strait of Hormuz. Iran has retaliated by targeting US military installations and assets across Bahrain and Kuwait, and US President Donald Trump has declared the ceasefire with Iran over. These escalating tensions have contributed to a broader risk-off environment, causing cryptocurrencies to slip along with other riskier assets. Additionally, the release of the FOMC meeting minutes on Wednesday revealed a divided stance on interest rates, with policymakers grappling with inflation concerns. This has led to a hawkish shift in rate expectations, further dampening risk appetite and impacting the cryptocurrency market. Institutional demand is also showing signs of weakness, with spot Exchange-Traded Funds (ETFs) recording an outflow of $7.29 million on Wednesday. This cautious sentiment among institutional investors could contribute to further price declines for XRP and XLM. From a technical perspective, XRP is trading below key support levels, including the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs). The price is also confined within a downward-sloping parallel channel, with the upper boundary acting as immediate overhead supply. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators suggest subdued momentum and waning bullish attempts. On the upside, resistance levels are aligned at the upper channel boundary, the 50-day EMA, and higher structural caps. A break above the $1.090 zone would be needed to ease immediate pressure, but failure to reclaim short-term averages could lead to further downside. XLM is also experiencing a bearish near-term bias, trading below key EMAs and showing selling-side dominance in both spot and futures markets. The price is supported by immediate support levels around the recent pivot zone and horizontal floors, with deeper slides exposing Fibonacci retracement levels. On the upside, resistance levels are aligned at the 100-day EMA, Fibonacci retracement levels, and higher structural caps. In conclusion, the cryptocurrency market is facing headwinds this week, with XRP and XLM leading the decline. Renewed US-Iran tensions, weakening institutional demand, and technical indicators pointing to further downside are contributing to this downturn. As the market continues to navigate these challenges, investors may need to exercise caution and consider the broader implications of these developments.
