XRP approaches $2 support once again, slipping to $2.06 on Wednesday as bearish sentiment spreads across the broader crypto market. Traders continue to unwind risk ahead of the upcoming Federal Reserve policy update, which has amplified caution and slowed liquidity across major assets. With interest weakening and volatility rising, XRP is now testing a crucial zone that may determine its short-term direction.

Market Weakness Drags XRP Lower

XRP has been grinding downward for several sessions. The drop mirrors risk-off conditions sparked by renewed macro uncertainty. Investors are waiting for clues about potential rate adjustments, inflation commentary, and the Fed’s assessment of economic strength. These factors continue to influence all major cryptocurrencies, but XRP faces added pressure due to thinning demand on both spot and derivatives markets.

Despite pockets of institutional inflows this month, recent sessions show lower open interest, reduced retail participation, and cooling momentum. This combination increases the possibility of a retest of the $2.00 support level.

Why the $2.00 Support Zone Matters Now

The $2.00 area has acted as a major technical pivot throughout the year. Bulls defended it during past corrections, preventing deeper losses. A clean break below this zone could accelerate downside momentum and push XRP toward the next support near $1.85.

Key elements that make this level important include:

• Strong historical reaction points
• High liquidity during trend reversals
• Cluster of stop-loss orders placed just below the level

If buyers fail to defend this region, short-term sentiment may deteriorate quickly.

Weak Interest Reflects Fading Short-Term Momentum

XRP’s recent decline is not driven by heavy selling alone. Instead, analysts highlight weak interest across trading venues. Volume is shrinking, and momentum indicators continue to drift lower. The lack of aggressive buying reflects broader caution gripping the crypto market.

Derivatives data shows declining leverage and smaller long-side participation. This reduction in exposure signals that traders prefer to wait for clearer macro direction before re-entering positions.

What the Federal Reserve’s Decision Means for XRP

The upcoming Fed meeting has become a major catalyst for determining market direction. Traders are watching three core signals:

1. The Fed’s Tone on Future Rates

A hawkish tone may weaken risk assets further. A neutral or dovish shift could help stabilize XRP.

2. Commentary on Inflation Persistence

If inflation remains sticky, risk markets may face more pressure.

3. Balance Sheet Strategy and Liquidity Guidance

Any policy suggesting tighter liquidity may push traders to reduce crypto exposure.

The market’s sensitivity to Fed communication means XRP’s reaction could be swift once the announcement arrives.

Technical Picture: Downside Pressure Remains in Play

XRP currently trades below key short-term moving averages. Momentum oscillators are leaning bearish, and the trend structure continues to slope downward as long as price remains under $2.15.

Traders are watching these levels closely:

Immediate Support

• $2.00
• $1.85

Key Resistance

• $2.15
• $2.32

A breakout above $2.15 would signal waning downside pressure. A close below $2.00 may confirm a bearish continuation.

Is a Reversal Still Possible?

Despite the current weakness, analysts note that XRP remains in a broader consolidation phase rather than a full breakdown. If the Fed delivers market-friendly guidance or volatility unwinds, XRP could form a rebound from the $2 area.

Additionally, long-term holders remain relatively steady, and several institutional desks continue to show interest in accumulating during dips. These factors may cushion XRP from deeper declines.

Final Thoughts

As XRP approaches $2 support, traders face a pivotal moment. Weak interest and Fed policy anticipation have created a challenging environment, but the upcoming macro update may provide the clarity needed for direction. Whether XRP rebounds or extends its slide will depend largely on how markets interpret the Fed’s message and how buyers respond at this critical support level.