The cryptocurrency market has slightly recovered from Sunday’s dip, but it is not out of the woods yet.
Bitcoin has reclaimed the $88,000 level, while Ether is approaching the $3,000 psychological level.
Meanwhile, XRP has failed to surge above the $2.0 psychological level and is now trading at $1.88.
Bulls are attempting to regain control after XRP dipped to the $1.81 support level on Sunday.
However, recovery remains fragile amid the mounting uncertainty over a potential partial shutdown of the United States (US) federal government later this week and the upcoming Fed rate decision.
XRP stays below $2.0 as on-chain metrics remain weak
XRP, the native coin of the Ripple blockchain, is up by less than 1% in the last 24 hours and is currently trading at $1.88 per coin.
The poor performance comes as Ripple’s on-chain metrics remain weak.
On-chain data reveals that the number of addresses actively transacting on the XRP Ledger (XRPL) has dropped by 3% to 45,000 on Sunday, from approximately 51,600 on January 5.
The decline indicates that on-chain activity is weakening.
In addition to that, the percentage of XRP’s circulating supply held in profit fell to 50.4% on Monday, from 77.2% on January 5 and 80.4% on November 10.
This massive dip suggests sentiment is declining amid investor confidence.
This suggests that investors may prefer to reduce exposure at the first sign of profit, adding to selling pressure.
Finally, XRP continues to face a weak derivatives market as risk-off sentiment consumes the broader cryptocurrency market.
Data obtained from CoinGlass shows that XRP’s Open Interest (OI) averages $3.38 billion on Tuesday, down from $3.4 billion the previous day, and $4.55 billion on January 6.
The persistent decline in OI suggests low retail interest and a lack of confidence in XRP at the moment.
If the OI continues to decline, XRP could face further selling pressure towards the April low of $1.61.
XRP bulls look to push price above $2.0
The XRP/USD 4-hour chart is one of the underperformers among the top 10 cryptocurrencies by market cap in recent weeks.
The coin continues to trade below the $1.90 resistance level despite the market regaining some strength.
The Relative Strength Index (RSI) has risen to 44 on the 4-hour chart, supporting a short-term bullish outlook.
A surge in the RSI above the midline could mark the transition from bearish to bullish.
If the bulls regain control, XRP could push towards the 50-day Exponential Moving Average (EMA) at $2.03 in the near term.
The 100-day EMA at $2.16 and the 200-day EMA at $2.29 could also provide a short-term target for the bulls.
Despite that, the Moving Average Convergence Divergence (MACD) indicator remains below the signal line, reinforcing the overall bearish trend.
If the bulls fail to overcome the $1.90 resistance, XRP could face further sell-off towards the key support level of $1.61.
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