XRP Exchange Supply Continues to Dry Up—Could History Be Repeating Itself?
Fresh on-chain data is putting XRP back in the spotlight as exchange reserves continue to decline across major trading platforms with price presently sitting at $1.10 per CoinCodex data.
According to market analyst Xaif Crypto, CryptoQuant data shows Upbit's XRP holdings have dropped to 6.43 billion XRP, their lowest level since May, while Binance still holds roughly 200 million fewer XRP than it did at its March peak.
While reserve data alone can't predict price direction, it reveals an important shift: less XRP is sitting on exchanges ready to be sold.
Exchange reserves measure the amount of XRP available for immediate trading. A sustained decline typically indicates investors are moving tokens into private wallets or long-term custody rather than leaving them on exchanges, a trend often associated with lower near-term selling pressure.
The pattern extends beyond Upbit. Binance, the world's largest crypto exchange by trading volume, continues to report lower XRP balances than earlier this year, suggesting liquid supply is tightening across multiple major platforms.
Why does this matter? Well, exchange reserves are a key gauge of market liquidity. As the supply of readily tradable XRP shrinks, any meaningful increase in demand can have a greater impact on price since buyers are competing for fewer available tokens.
XRP Exchange Activity Cools as Shrinking Supply Fuels Bullish Outlook
CryptoQuant data also shows exchange activity cooling. Binance deposits and withdrawals have fallen from about 650,000 transactions in June to roughly 350,000, a decline of nearly 46%.
Slower transfer activity often signals fewer traders are actively moving coins between exchanges and personal wallets. While this can reflect a quieter market, it may also point to investors holding their positions instead of trading frequently.
This combination of shrinking reserves and declining exchange activity is what caught Xaif Crypto's attention. The analyst noted that a similar on-chain setup emerged ahead of XRP's October 2025 rally, when falling exchange balances and easing selling pressure preceded a strong price advance.
What’s next? Even though historical patterns are ideal stepping stones, broader market conditions, institutional demand, regulatory developments, and macroeconomic factors will ultimately determine XRP's next move.
As a result, the current on-chain picture suggests XRP's liquid supply continues to tighten. This backdrop is drawing additional attention as some veteran analysts maintain that a broader technical breakout could eventually target $6.40, with longer-term projections extending much higher if bullish momentum persists.
Furthermore, reports of reduced whale selling and growing XRP Ledger activity, including more than 1.4 million AI agent transactions, suggest network utility is expanding alongside improving market fundamentals.
For now, declining exchange reserves and cooling trading activity remain two of XRP's most closely watched on-chain indicators. If demand strengthens while exchange balances continue to fall, the market could be setting up for a much larger move.
