Ripple and Stellar outlook: Why are XRP and XLM falling as the Fed strikes a hawkish tone?

• XRP’s correction deepens towards $1.30 following the Fed’s hawkish decision to leave rates unchanged.
• XLM reverses part of this week’s three-day recovery, falling over 2% on Thursday.
• Recovery in both altcoins faces constraints from deteriorating derivatives indicators and bearish on-chain signals.

Bearish sentiment continues to weigh on Ripple (XRP) and Stellar (XLM) on Thursday, with derivatives positioning and on-chain indicators keeping both under pressure. As XRP approaches crucial support at $1.30, XLM surrenders part of its recent advance. 

Risk assets, including XRP and XLM, also face a cautious market environment following the Federal Reserve’s (Fed) two-day October policy meeting. The central bank left interest rates at 3.75%-4.00%, but inflation concerns and the hawkish undertone accompanying its cautious hold added to the pressure.

Do derivatives indicators point to further weakness?

Conditions in Ripple and Stellar derivatives markets continue to deteriorate. On Thursday, CoinGlass’ long-to-short ratios stand at 0.60 for XRP and 0.74 for XLM, close to their lowest readings in over a month. Readings below one reflect bearish sentiment, with traders positioning for a decline in asset prices.

XRP’s funding rates offer a contrasting signal, having moved into positive territory on 16 October. Thursday’s reading of 0.0080% means long positions are paying short positions, pointing to a mildly bullish outlook.

By contrast, XLM’s funding rates turned negative on Thursday to reach -0.0051%. With short positions paying long positions, the reading points to a bearish bias.

What does on-chain data reveal about sentiment?

A bearish picture for both altcoins emerges from CryptoQuant’s summary data. In XRP’s spot and futures markets, large whale orders coincide with heating market conditions and sellers retaining the upper hand. Together, these signals reflect a cautious, bearish bias among Ripple traders.

Sellers also dominate XLM’s spot and futures markets, signalling a negative outlook among Stellar traders.

XRP technical outlook: Can key support at $1.300 hold?

A bearish short-term bias persists in XRP as it trades at $1.302 on Thursday, only slightly above horizontal support at $1.300 and substantially below its key Exponential Moving Averages (EMAs). Overhead resistance comprises the 100-day EMA at $1.333, the 50-day EMA at $1.357 and the 200-day EMA at $1.372. This tightly grouped band of trend resistance suggests that the recent recovery remains constrained.

Momentum remains muted. Although the Moving Average Convergence Divergence (MACD) has improved modestly and moved slightly above the zero line, a Relative Strength Index (RSI) reading of 41 points to persistent downside pressure.

The recently defended horizontal floor around $1.300 provides immediate support. A clear breach would likely pave the way for a deeper correction over the coming sessions.

For any rebound, the first resistance lies near $1.333 at the 100-day EMA, with the 50-day EMA around $1.357 and the 200-day EMA at $1.372 following above. Bulls would need to reclaim this key zone to soften the bearish bias. Further up, $1.540 presents a more substantial hurdle before major resistance at $1.900, where earlier supply is likely to resurface if the pair sustains its recovery.

XLM technical outlook: What do weakening momentum indicators signal?

Trading at $0.168 on Thursday, XLM retains a bearish short-term bias below its key EMAs. Although the pair has stabilised after recent lows, the broader trend appears constrained by overhead resistance from the 50-day and 100-day EMAs around $0.187 and the 200-day EMA at $0.190.

Selling pressure continues to dominate despite easing volatility. The RSI remains close to 35, while the MACD line stays below zero, underscoring weak momentum.

Any recovery first faces the horizontal resistance around $0.173. Beyond that, the closely grouped EMAs between $0.187 and $0.190 are likely to restrict further gains. A stronger bullish move would encounter the next significant horizontal hurdle further away at $0.234.

Immediate support lies at $0.153. A decisive breach would leave room for a deeper decline; however, staying above this level may enable XLM to consolidate before making another attempt at the $0.173 zone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)