Binance’s XRP Reserves Slide to Two-Year Low as Exchange Supply Tightens

The amount of XRP held on Binance has dropped significantly, signalling a potential shift in investor behaviour and market structure. On-chain data from CryptoQuant shows the leading exchange now holds roughly 2.5 billion XRP. This marks a decline from about 3.2 billion in November 2024 and a return to levels last seen in early 2024.

The decline highlights a growing trend as fewer tokens remain readily available for trading. Historically, falling exchange reserves often point to reduced immediate selling pressure. This is because investors typically move assets into private wallets when planning to hold for the long term. As a result, reduced exchange supply can support price stability, especially during uncertain market conditions.

Outflows Signal Structural Shift

Analysts believe the drop reflects more than a temporary fluctuation. Reserve data points to a material contraction in balances, with holdings hovering near multi-year lows. In total, approximately 700 million XRP have left the exchange over roughly 15 months. This steady movement suggests calculated repositioning rather than panic-driven withdrawals.

Moreover, the pace of outflows appeared to accelerate after Binance added support for the RLUSD stablecoin on the XRP Ledger. While many traders expected the update to boost on-chain activity, the immediate outcome seems to be increased token withdrawals instead.

Market watchers often interpret sustained outflows as a sign of rising confidence among holders. Coins stored off exchanges are less likely to be sold quickly. Consequently, a tighter supply can reduce volatility and help cushion prices against sudden drops.

XRP Market Performance

The tightening supply comes as XRP trades near $1.50, reflecting a modest 1.9% decline over the past 24 hours. Additionally, the asset’s market cap lost more than $11 billion, falling from $101 billion to around $90 billion at press time.

While the broader crypto market has shown muted momentum, XRP’s pullback appears to be more pronounced. Heavy selling pressure on Upbit may have contributed to the move, with reports indicating that roughly $50 million worth of the asset was recently offloaded. Such large transactions often weigh on short-term sentiment.

Still, some analysts see opportunity in the shrinking reserve base. Lower exchange liquidity can point to gradual accumulation, a condition that has historically preceded price rebounds when demand strengthens.