• XRP extends sell-off as risk-off sentiment weighs across the broader crypto market.
• The XRP Ledger records a significant increase in active addresses above 32,000.
• Mild institutional support via spot ETFs fails to absorb selling pressure, leaving XRP vulnerable to a weak retail market.

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.

The remittance token has corrected so far by 19% in February, 7% this week and approximately 3% intraday. Unless the short-term technical structure stabilizes and is supported by steady institutional interest, the path of least resistance would remain downcast toward the October 10 low at $1.25 and Friday’s support at $1.12.

XRP Ledger’s on-chain activity soars 

The XRP Ledger (XRPL) has since Monday recorded a significant increase in the number of active addresses transacting on-chain. According to CryptoQuant’s data, the Active Addresses metric nearly doubled from approximately 17,000 addresses on Sunday to 32,700 on Wednesday. 

The surge in addresses transacting on the XRPL indicates greater engagement with the protocol and reflects growing interest in XRP. Moreover, it signals rising confidence among holders as sentiment gradually improves. 

However, investors should temper expectations, as the same increase may signal volatility, leading to instability and price fluctuations.

Meanwhile, institutional interest in XRP remains steady, albeit with mild inflows into XRP spot Exchange-Traded Funds (ETFs). For five consecutive days, US-listed XRP ETFs have recorded inflows, with $3.26 million deposited on Tuesday. 

The cumulative inflow stands at $1.23 billion, and the net assets under management at $1.01 billion, according to SoSoValue. Steady inflows into ETFs suggest positive sentiment around the underlying asset.

Despite stable institutional demand, retail interest in XRP is on the back foot, as futures Open Interest (OI) falls to $2.44 billion on Wednesday, slightly below $2.5 billon the previous day. OI has generally stayed in a downtrend since the record high of $10.94 billion in July, suggesting that investors lack confidence in XRP’s ability to recover and sustain an uptrend.

Technical outlook: XRP edges lower amid weak technicals 

XRP is trading well below the 50-day Exponential Moving Average (EMA) at $1.80, the 100-day EMA at $1.99 and the 200-day EMA at $2.18. All three moving averages are sloping downward, indicating a bearish momentum bias.

The Relative Strength Index (RSI) at 32 is poised to enter oversold territory on the daily chart, proposing sellers have the upper hand. Meanwhile, the support-turned-resistance at $1.40 limits XRP’s upside, putting the demand zone at $1.25 in focus. Below this level, losses may escalate to retest Friday’s low at $1.12.

Conversely, a knee-jerk reversal would not be a pipe dream if the Moving Average Convergence Divergence (MACD) indicator lifts above the signal line on the same chart. The red histogram bars should continue their contract to usher in a bullish transition that may push XRP above Friday’s high at $1.54.