XRP Investors Move Assets to Cold Storage - Will December Bring Volatility?

As the crypto markets continue to experience a bear trend, XRP has demonstrated significant weakness, prompting various investors—including retail traders, whales, and institutional players—to purchase the altcoin during this downturn. This report delves into XRP's supply situation, whale activities, and the impacts of recent ETF approvals, while speculating on potential price movements this December.

Key Takeaways

Investors are increasingly moving XRP to cold storage, resulting in a noticeable decline in supply on exchanges.
XRP exchange deposits have drastically dropped, indicating a stronger accumulation phase.
Whales are significantly decreasing their exchange activity while holding more XRP.
The introduction of XRP Spot ETFs has attracted institutional investment, leading to substantial net inflows.
XRP has shown resilience despite price declines, with potential for price rebounds if demand continues.

Investors pull XRP into cold storage - December volatility ahead?

XRP Heading Towards a Supply Squeeze?

XRP is currently trading below its peak levels from 2025, prompting investors to aggressively accumulate. This trend has led to a sharp reduction in the supply of XRP available on exchanges over the past two months. Notably, Exchange Depositing Transactions fell from 19,400 during the October market crash to below 1,000.

XRP exchange deposits

According to recent data, these transactions have largely stabilized below 1,000, currently about 228. This signifies a major drop in XRP being deposited into exchanges. In total, XRP exchange balances have plummeted by 29% since February as billions of XRP are being taken out of centralized exchanges (CEXs) for long-term storage.

The total amount of XRP held on exchanges has fallen dramatically from 3.95 billion to just 2.6 billion.

XRP exchange balances

This reduction in supply amounts to a 34.18% drop, equating to a loss of 1.35 billion XRP in sell-side liquidity over the last two months. This substantial decline suggests that demand for XRP is increasing, as more investors are opting to move their coins to cold wallets or self-custody solutions. Overall, these conditions may indicate a silent supply squeeze may be in the works. The pressing question now is: who is doing the accumulating?

Whales Accumulate While Prices Dip

A significant portion of this decline is attributable to large market participants, or whales. The Whale to Exchange Flow metric has fallen from 48,700 in October to just 1,000 at the time of writing.

XRP whale to exchange

This decrease suggests that whales are sending fewer XRP coins to exchanges, opting instead to hold their existing assets and accumulate from other sources. In tandem with this trend, exchange inflows in October and November have remained notably low. Recent data indicates that XRP has recorded positive Netflow for just 14 days in the last two months.

XRP spot netflow

Currently, outflows dominate the market, standing at -$8.23 million, improved from -$35 million the previous day.

Rise in Institutional Demand with XRP Spot ETFs

The launch of XRP ETFs has further invigorated the market by attracting institutional investors. Previously, XRP was primarily supported by small-scale traders, but with the recent ETF approvals, the landscape has shifted dramatically.

The introduction of XRP Spot ETFs has resulted in notable net inflows, with total net assets skyrocketing from $248 million to $687 million—a jump of $439 million within just two weeks.

XRP spot etfs

This extensive inflow indicates heightened demand from institutional investors, effectively reducing the supply available in the market.

What Lies Ahead for XRP in December?

So far in the fourth quarter, Ripple's XRP has been under considerable selling pressure, falling from a peak of $3.05 to a low of $1.80. Recently, after breaking above $2, XRP has been oscillating within a narrow consolidation range between $2.0 and $2.2.

XRP price charts

Despite these challenges in price performance, the demand for XRP remains robust. With the market in a state of accumulation, indications suggest that a supply shock might be imminent. If demand persists, XRP could break out of consolidation and aim to reach the $2.5 resistance level. Successfully reclaiming this mark in December could set the stage for a price target of $3.10. However, if accumulation drags on, XRP might continue trading within the $2.0-$2.3 range.

Conclusion

XRP is at a pivotal moment, where investor actions and accumulating patterns signal potential volatility ahead. Keep an eye on market dynamics as December unfolds.