The cryptocurrency market is abuzz as XRP reserves on Binance, the world’s largest crypto exchange, have plummeted by 45% over the past year. This dramatic shift, as reported by CryptoQuant, indicates a major supply reduction that could significantly influence XRP’s price trajectory.
Understanding the Decline in XRP Reserves
As of January 18, 2025, Binance’s XRP reserves were valued at approximately $10.16 billion. Fast forward 12 months, and that figure has dropped to $5.55 billion. This decline reflects a clear trend: investors are moving XRP off exchanges, possibly into personal wallets or long-term storage. Such behavior often signals accumulation rather than liquidation, indicating a positive sentiment among holders.
Periods of low exchange reserves often correlate with reduced selling pressure. In mid-2025, for instance, a sharp decrease in XRP reserves coincided with a notable price rally. If history repeats itself, the current contraction could set the stage for another upward swing in XRP’s value.
Price Trends and Market Dynamics
Despite plummeting reserves, XRP’s price remains relatively stable. Currently trading at $2.06, the token is hovering just above its 50-day Simple Moving Average (SMA) at $2.02. This suggests short-term support, preventing a significant price breakdown. However, the 200-day SMA at $2.53 indicates that XRP is still in a long-term bearish trend, requiring sustained upward momentum for a possible recovery.
Momentum indicators, such as the 14-day RSI sitting at 50.7, reinforce this cautious outlook. The market conditions appear neutral, with XRP neither oversold nor overbought, leaving the door open for flexibility in price action.
What’s Next for XRP Investors?
The 45% drop in Binance’s XRP reserves highlights a tightening supply. If demand picks up, this scarcity could lead to significant upward price movements. Historically, prolonged dips in reserves have preceded bullish phases, making the current state a critical period for investors to watch.
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Stay informed and continue monitoring the market as we could be on the brink of a pivotal rebound for XRP and the broader crypto market.
