XRP’s price remains under pressure from broader market declines. While it saw a 5.7% rise on Friday, this only partially offset a 7.1% loss earlier in the week. However, a recent on-chain analysis suggests the XRP market may be entering an accumulation phase, which could set the stage for stronger demand and a potential recovery.
According to a QuickTake post by pseudonymous analyst CryptoOnchain, the amount of XRP held on Binance has dropped significantly, based on data from the XRP Ledger’s Exchange Reserve metric. The analyst notes that XRP exchange reserves have recently fallen to around 2.5 billion XRP, their lowest level since early 2024. This marks a notable decline from a peak of roughly 3.2 billion XRP in November 2024, meaning over 700 million XRP have been withdrawn from Binance in the past 15 months.
Typically, large movements of coins to exchanges signal that investors are preparing to sell. Conversely, reduced exchange inflows—or outright outflows—suggest investors are less willing to part with their holdings, reflecting stronger conviction. CryptoOnchain explains that this outflow from exchanges indicates a significant reduction in sell-side liquidity.
The analyst further suggests that declining exchange reserves often precede accumulation phases and can be a bullish signal in the short term. This is because lower exchange holdings point to a decreased appetite for selling among market participants. CryptoOnchain also notes that this trend may indicate investors are moving assets into cold storage for long-term growth, painting a more optimistic outlook for XRP’s price.
In summary, the analyst states that XRP reserves hitting a two-year low could create a supply shock, meaning any rebound in market demand might trigger a substantial price increase.
At the time of writing, XRP is trading at $1.40, having gained 3.07% over the past 24 hours, according to CoinMarketCap data.
Frequently Asked Questions
FAQs Binances XRP Reserves Potential Price Impact
BeginnerLevel Questions
1 What does it mean that Binances XRP reserves have fallen sharply
It means that the amount of XRP tokens held in Binances official wallets has decreased significantly over a short period
2 Why is this news important for XRPs price
Large changes in exchange reserves can signal shifts in supply and demand A sharp drop might mean large amounts of XRP are being withdrawn which could reduce selling pressure or indicate accumulation by large holders
3 Is a drop in exchange reserves good or bad for the price
Its often viewed as a potentially bullish sign When coins leave an exchange they are typically moved to private wallets for longterm holding reducing the immediate supply available for sale on the market
4 Could this mean people are selling their XRP
Not necessarily If they were selling on Binance the reserves might stay steady or even increase A sharp drop suggests withdrawal from the exchange which is usually the opposite of preparing to sell immediately
5 Where can I check exchange reserve data like this
You can find this data on blockchain analytics platforms like Nansen CryptoQuant or Glassnode which track the flows of crypto to and from major exchange wallets
Intermediate Advanced Questions
6 What are the main reasons XRP might be withdrawn from Binance
Key reasons include
Accumulation by Whales Large investors moving XRP to private custody
StakingUse in DeFi Moving XRP to other platforms for lending liquidity provision or use on the XRP Ledger
Precaution Before News Withdrawing ahead of major announcements or volatility
Loss of Confidence in CEX Users selfcustodying assets though this is typically a broader market trend
7 Does a reserve drop guarantee the price will go up
No it is not a guarantee It is one indicator among many Price is ultimately set by buy and sell orders While reduced exchange supply can support a price increase it must be met with actual buying demand Broader market sentiment and news are crucial