XRP faces increased bearish pressure amid signs of a price bottom in on-chain indicators

XRP dropped below $2 as heightened risk-off sentiment rocked the crypto market.

XRP's 30-day MVRV Ratio indicates prices may have found a bottom.

XRP could bounce off a descending channel's lower boundary if it fails to recover the support near $2.00.

Ripple's XRP declined 10% on Monday, trading around $1.96 at press time after odds of its price plunging below $2.00 skyrocketed to 81% on prediction platform Polymarket. Despite the high risk-off sentiment, XRP's 30-day Market Value to Realized Value (MVRV) Ratio indicates prices may have found a bottom.

Bettors anticipated XRP's decline amid market-wide risk-off sentiment

Market sentiment toward XRP has worsened in the past few days, with bettors anticipating a further decline in the remittance-based token.

Odds that XRP will decline below $2 increased from 62% to 81% over the weekend, according to Polymarket data. Meanwhile, odds of XRP reaching a new all-time high of $3.50 declined from 51% at the beginning of March to 7% on Monday.

Shortly after the sharp movement in these odds, XRP breached the $2 level.

The weak prices can be traced to the overall crypto market sentiment, which is seen in the crypto Fear and Greed Index plunging to 20.

Additionally, the failure of US President Donald Trump to mention concrete plans of including XRP in the country's digital asset stockpile wiped out signs of bullish momentum among investors. Trump reiterated his executive order at the first White House Crypto Summit on Friday that the US would establish a Bitcoin reserve and a digital asset stockpile of altcoins using crypto assets from criminal or civil asset forfeiture.

The executive order disappointed investors who had anticipated the government would deploy new capital to purchase Bitcoin and altcoins like XRP, considering Trump's stated intentions of including them in the country's crypto reserve on February 2.

Meanwhile, the increased bearish sentiment has seen XRP's 30-day MVRV Ratio plunge to a low of 16%. The MVRV calculates all investors' average profit/loss over a given time frame.

XRP 30-day MVRV. Source: Santiment

Over the past year, XRP often notes a reversal whenever the 30D MVRV declines below 10%. As a result, XRP could be primed for a recovery.

XRP eyes descending channel's support as bears mount pressure on $2.00

XRP has witnessed $36.01 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions accounted for $28.63 million and $7.38 million, respectively.

XRP bears pushed its price below the support near the $2.00 psychological level after it declined into a descending channel over the weekend.

XRP/USDT daily chart

If XRP fails to recover the support near $2.00, the lower boundary of the descending channel could prove crucial to help it initiate a price bounce.

On the upside, XRP has to sustain a firm move above the upper boundary of the descending channel and reclaim the $2.72 level to flip the bearish pressure.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) lines declined below their respective moving averages, indicating a potential prolonged increase in the bearish pressure. Meanwhile, the Stochastic Oscillator (Stoch) is in the oversold region, signaling a potential price reversal.

A daily candlestick close below the lower boundary of the descending channel will invalidate the thesis and send XRP toward $1.35.