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The broader cryptocurrency market is under selling pressure in the early Tuesday session, fueled by a mix of macroeconomic uncertainties, profit-taking and risk-off sentiment.
The markets are anticipating the commencement of the Fed's policy meeting on Tuesday and Wednesday. Traders are pricing in a 4.4% chance of the central bank cutting rates.
"We expect the Fed to keep rates steady and avoid explicit forward guidance about the policy path ahead," analysts at Deutsche Bank said in a note to CNBC, adding that "the overall tone of the meeting is likely to echo comments from Chair Powell and his colleagues in recent week."
Major cryptocurrencies are trading down, and XRP is no exception. At press time, XRP was down 3.98% in the last 24 hours to $2.10.
After sustaining four days of drop since May 2, XRP approached the $2 mark, dropping near the daily SMA 200 at $2.07. The loss continued today, reaching lows of $2.08, putting XRP on course for its fifth day of declines since May 2. XRP has broadly declined since highs of $2.36 on April 28, having marked six out of seven days in losses since then.
Key levels to watch
Eyes are on today's price action as XRP nears the $2 mark, which many view as critical for its next move. A break and close below $2 might put the sellers in command, causing XRP to retest the critical support level at $1.61, where buyers are expected to jump in.
XRP remains trapped between $2.60 and the $2 support, indicating buying on dips and selling on rallies. The recent drop has caused XRP to return below the daily SMA 50 at $2.174, returning to trading between its daily moving averages of 50 and 200, as it has since early February. The move increases the chances of consolidation in the coming days.
On the other hand, a decisive break above $2.60 might cause XRP to target the $3 level once more.
Vladislav Sopov