XRP Exchange Reserves on Binance Reach Six-Month Low: Easing Selling Pressure

XRP is currently testing a crucial long-term demand zone just below $1.90 as the altcoin market experiences ongoing challenges. While price movements have shown vulnerability, on-chain data reveals a significant drop in XRP reserves on Binance, indicating reduced selling pressure. This situation sets the stage for potential stabilization or further declines in the coming days.

Key Takeaways

XRP is testing a critical support level near $1.90 amid broader altcoin market struggles.
A decline in exchange reserves on Binance signals reduced sell-side pressure.
Although the price shows weakness in the short term, on-chain changes may suggest a potential stabilization or relief.
The $1.80 to $1.90 range is a key demand zone for XRP, vital for future price movements.

XRP's Current Market Situation

XRP is currently facing a crucial testing ground as it hovers below the $1.90 mark, reflecting increasing fragility in the market. After failing to maintain upward momentum, price action indicates a potential shift toward a bearish phase. This situation leaves altcoins vulnerable to deeper losses as market conditions continue to degrade.

However, despite the weakening price, new data from CryptoQuant indicates an interesting development: a notable decrease in XRP's exchange reserves on Binance. This decline means that fewer tokens are available on exchanges for immediate sale, suggesting a reduction in selling pressure rather than aggressive selling. This discrepancy between market price trends and on-chain supply data raises questions about how much selling pressure remains, especially if prices continue to decline.

Historically, in similar market conditions, a decline in reserves has often led to periods of stabilization or upward rallies, particularly when market sentiment is excessively pessimistic. As XRP remains beneath the $1.90 mark, what happens next will be crucial. The relationship between dwindling exchange supplies and declining technical indicators will determine whether XRP can establish a base or fall further with the broader altcoin market.

Significant Decline in Exchange Reserves

Recent data highlights a critical shift in XRP’s supply dynamics at a significant time for its price action. According to the XRP Ledger Exchange Reserve chart, reserves on Binance have fallen dramatically to about 2.66 billion XRP—the lowest level recorded since July 2024. This reduction suggests a meaningful decrease in the amount of XRP available for trading.

XRP Ledger Exchange Reserve | Source: CryptoQuant

Historically, reductions in exchange reserves are regarded as positive signs, indicating that investors are moving their tokens off exchanges and into self-custody. This shift reduces immediate selling liquidity. A limited supply available for trading can lead to price movements, as modest demand can have a more significant effect on prices.

This on-chain development occurs as XRP trades at a technically significant level, testing a major demand zone between $1.80 and $1.90, which previously acted as support. Momentum indicators like the RSI suggest that bearish pressure might be easing, though a confirmed price reversal is still pending.

With declining reserves and robust technical support, the likelihood of stabilization or a price rebound increases. If buyers can uphold the $1.80 level, the reduced supply could trigger a swift recovery. Conversely, a significant decline beneath this level would challenge this bullish narrative and suggest further downside risks.

XRP's Price Trends and Market Structure

Trading around the $1.87 level on its weekly chart, XRP extends a prolonged downward trend that has undermined the earlier bullish momentum. After peaking above the $3.40 to $3.60 range, the price has consistently posted lower highs and lower lows, indicating a clear shift toward a bearish medium- to long-term structure. Recent weekly candles exhibit ongoing selling pressure with minimal lower wicks, pointing to weak buying interest at current levels.

XRP testing critical support | Source: XRPUSDT chart on TradingView

From a trend perspective, XRP has fallen below essential weekly moving averages, with its price now resting beneath the faster-moving average that has turned into resistance around the $2.40 to $2.60 range. Although the long-term moving averages remain below the current price, suggesting that the macro uptrend from previous years is still intact, the momentum has significantly faltered.

The area around $1.80 to $1.90 is critical. This zone has historically provided structural support and must be defended by bulls to prevent a deeper decline. A sustained weekly close below $1.80 would considerably weaken the general market structure and expose XRP to a drop toward the $1.50 range or lower.

As selling activity increased during the drop from $2.50, dwindling volume in recent weeks indicates exhaustion rather than accumulation. For XRP to regain its strength, it must reclaim the $2.20 to $2.40 zone and establish a foothold above the former support now acting as resistance.

Image from ChatGPT, chart from TradingView.com