XRP is gradually approaching one of the most significant structural phases in its history. While its price trend has been largely bearish and overall crypto market sentiment remains cautious, on-chain data reveals a different narrative.
According to Glassnode, the amount of XRP held on centralized exchanges has dropped to approximately 1.5 billion tokens, marking its lowest level in over a year. This decline coincides with accumulation from newly launched XRP ETFs, setting the stage for a potential shift in the altcoin’s price dynamics as we move toward 2026.
XRP Exchange Balances Hit Multi-Year Lows
Glassnode’s data shows a clear and steady decline in XRP balances on exchanges throughout 2025. Starting the year with around 4 billion XRP on centralized platforms, these balances have consistently fallen, with a notable drop in the fourth quarter. The current level near 1.5 billion is among the lowest seen in recent years.
This reduction has persisted despite XRP’s ongoing price downturn, indicating that a segment of holders is choosing to move tokens into long-term storage even as others sell. This trend supports bullish momentum, as lower exchange balances reduce immediate selling pressure and make the asset more responsive to new demand.
A key driver behind this supply contraction is the emergence of U.S.-based spot XRP ETFs, which have become a major source of demand. Market estimates suggest these six ETF products have absorbed roughly 750 million XRP since the first launched in November. As ETFs continue to withdraw XRP from exchanges, the available liquid supply in the spot market keeps diminishing. While this doesn’t trigger an instant price reaction, it alters the supply-demand balance, with effects likely to become more apparent in 2026.
Weekly Chart Suggests Exhaustion as XRP Holds Support
Alongside tightening on-chain supply, technical indicators are beginning to tell a similar story. Analyst Steph Is Crypto recently highlighted that XRP is now testing a crucial horizontal support zone on the weekly chart.
After declining from mid-2025 highs near $3.50, XRP’s price has consolidated between $1.90 and $2.00—a level that previously served as a springboard earlier in the market cycle. Additionally, the weekly Stochastic RSI has entered deeply oversold territory, signaling that selling pressure may be largely exhausted.
The analysis notes that market turning points often form when downward momentum loses steam, leaving sellers with limited ability to push prices lower. Based on these conditions, traders might anticipate XRP transitioning into a bullish phase in early 2026.
Frequently Asked Questions
Of course Here is a list of FAQs about XRPs shrinking available supply in the context of potential ETF purchases designed to be clear and helpful for all levels of understanding
Beginner Definition Questions
1 What does available supply is shrinking actually mean
It means the number of XRP tokens that are readily available for anyone to buy on the open market is decreasing This happens when large entities buy and hold XRP effectively taking it off the trading exchanges and locking it up for the long term
2 What is an ETF and why does it matter for XRP
An ETF is an investment fund that trades on stock exchanges A spot XRP ETF would allow regular investors to buy shares that represent direct ownership of XRP without having to manage crypto wallets If approved it could bring massive institutional investment into XRP increasing demand dramatically
3 Why is 2026 mentioned as an important date
Many analysts and market observers point to 2026 as a potential timeframe when major regulatory clarity for crypto in the US could be achieved making the approval of crypto ETFs more likely Its not a guaranteed date but a common benchmark for when conditions might be favorable
Mechanism Impact Questions
4 How exactly would an ETF purchase shrink the available supply
An ETF provider would need to purchase massive amounts of XRP to back the shares they sell to investors They would buy this XRP from the open market and store it in secure custodial wallets This largescale longterm holding removes those tokens from the circulating supply that everyday traders can access
5 Whats the difference between total supply circulating supply and available supply
Total Supply All 100 billion XRP that will ever exist
Circulating Supply The amount currently in public hands and not held by Ripple
Available Supply The portion of the circulating supply that is actually liquid and for sale on exchanges This is the number that shrinks with large ETF purchases
6 What is the basic economic effect of a shrinking supply with rising demand
If demand for XRP increases while the available supply to buy decreases