Bitcoin and Altcoins Like Pepe, Jasmy, Stellar Plunge as Crypto Market Sees Broad Pullback
Introduction: A Sea of Red Engulfs the Crypto Market
The cryptocurrency market experienced a sharp downturn on July 25, with Bitcoin (BTC) and major altcoins like Pepe (PEPE), Jasmy Coin (JASMY), and Stellar (XLM) plunging by double-digit percentages. The pullback comes after weeks of bullish momentum, as investors engage in profit-taking and macroeconomic uncertainties loom.
Bitcoin, the leading cryptocurrency, dropped by over $8,200 from its all-time high, dragging the total crypto market capitalization down from a year-to-date peak of $4 trillion to $3.89 trillion. Meanwhile, altcoins suffered even steeper declines, with PEPE, JASMY, and XLM each falling by more than 15% from their weekly highs.
This article explores the key factors behind the market correction, including profit-taking behavior, mean reversion dynamics, and external macroeconomic pressures. We also analyze how different altcoins are responding to the downturn and what traders should watch next.
Profit-Taking Drives Market Correction
One of the primary catalysts for this week’s crypto sell-off is profit-taking—a common strategy where investors cash out gains after a significant price rally. Both institutional and retail traders have been offloading holdings following Bitcoin’s surge earlier this year.
Institutional Selling Pressure
- Galaxy Digital, a major crypto investment firm, reportedly sold over $500 million worth of Bitcoin this week.
- Chris Larsen, co-founder of Ripple Labs, sold approximately $140 million in XRP tokens, adding to downward pressure on altcoins.
Whale Activity Declines
Data from blockchain analytics platforms like Nansen shows that large holders (whales) have reduced their exposure to certain assets:
- Pepe whale holdings dropped from 8.88 trillion PEPE tokens to 8.84 trillion.
- Similar trends were observed in other altcoins as "smart money" investors locked in profits.
Historically, profit-taking phases are followed by consolidation periods before the next major move. The current pullback aligns with past cycles where extended rallies led to temporary corrections.
Mean Reversion and Overbought Conditions Accelerate Decline
Beyond profit-taking, technical indicators suggest that many cryptocurrencies were due for a correction due to mean reversion and overbought conditions.
What Is Mean Reversion?
Mean reversion is a financial theory stating that asset prices tend to return to their historical averages after extreme deviations. Many altcoins had surged far beyond their typical trading ranges before this week’s drop.
Stellar (XLM) as a Case Study
- On July 25, XLM was trading at $0.4160, significantly above its 100-day moving average of $0.3145.
- Its standard deviation spiked to 0.1015, matching December 2023 highs—a sign of excessive volatility.
- The Relative Strength Index (RSI) hit 89.30, deep in overbought territory, signaling an impending correction.
Similar patterns were seen in other altcoins like PEPE and JASMY, which had rallied aggressively before retracing sharply.
Macroeconomic Factors Adding Pressure
The broader financial landscape has also contributed to crypto’s downturn, with two major events weighing on investor sentiment:
1. Federal Reserve Interest Rate Decision
- The Fed is expected to hold rates steady but may signal only two rate cuts in 2024.
- Higher-for-longer interest rates typically reduce liquidity for risk assets like cryptocurrencies.
2. Trump’s Tariff Deadline (August 1)
- The U.S. is set to impose higher tariffs on multiple countries unless trade agreements are reached.
- Trade tensions could trigger market volatility, prompting investors to reduce speculative bets ahead of the deadline.
These macro risks have historically led to short-term pullbacks in crypto before stabilizing once clarity emerges.
Comparing Altcoin Performance: PEPE vs. JASMY vs. XLM
While most altcoins fell sharply, their individual performances varied based on utility, market positioning, and investor sentiment:
| Token | Weekly Decline | Key Factors |
|---------|--------------|-------------|
| Pepe (PEPE) | ~18% | Meme coin volatility; whale selling |
| Jasmy Coin (JASMY) | ~16% | IoT-focused project; speculative trading |
| Stellar (XLM) | ~15% | Overbought RSI; mean reversion at play |
- PEPE: As a meme coin with no intrinsic utility, it remains highly sensitive to market sentiment and whale movements.
- JASMY: Despite its IoT use case, it remains a speculative asset prone to sharp swings during broader corrections.
- XLM: A more established blockchain project but still susceptible to technical pullbacks after rapid gains.
Strategic Conclusion: What Comes Next?
The current crypto pullback is driven by a mix of profit-taking, technical corrections, and macroeconomic uncertainty—a pattern seen in previous market cycles rather than a structural breakdown. Here’s what traders should monitor:
Key Watchpoints:
1️⃣ Fed Policy Signals: Any hints of delayed rate cuts could extend bearish pressure.
2️⃣ Tariff Developments: A resolution could stabilize markets before August 1.
3️⃣ Bitcoin’s Support Levels: Holding above key psychological levels ($60K-$65K) will be crucial for altcoin recovery.
While short-term turbulence persists, long-term investors may view this dip as an accumulation opportunity—especially if macroeconomic conditions improve in Q3 2024. Stay informed with real-time data and avoid reactionary trading amid heightened volatility.