XRP exchange reserves drop by 250M tokens – Is a price recovery ahead?

XRP exchange reserves have dropped across major trading platforms, with Binance recording its lowest holdings since December 2022 amid sustained withdrawals.

Between the 28th and 30th of October, Binance reserves reportedly declined 8.18%, dropping from 2.69 billion to 2.47 billion XRP. Additionally, Bybit, on the other hand,  registered a 6.54% decline, losing 20 million XRP as reserves fell to 286 million.

Furthermore, Bithumb followed with a 10 million XRP reduction, bringing its holdings to 1.837 billion XRP. The three exchanges combined lost 250 million XRP, potentially reducing the supply readily available for selling.

This broader reserve decline raised questions about whether the shrinking exchange supply could support XRP’s price recovery.

Spot outflows reinforce the declining reserve trend

In addition to declining reserves, XRP‘s Spot market experienced continued exchange outflows, further signaling the withdrawal trend. According to CoinGlass, XRP had registered $5.78 million in spot net outflows at the time of writing.

Notably, the netflows were negative for most of the recent trading period, with occasional inflows. This persistent withdrawal reduces exchange-held balances, potentially limiting the amount of tokens available for immediate selling.

However, the continued outflows didn’t necessarily signal higher demand, especially given the headwind of XRP’s recent losses.

XRP’s NVT collapse signals changing network activity

Meanwhile, XRP’s on-chain valuation metrics witnessed a drastic change as the exchange reserves kept declining.

The Network Value to Transactions (NVT) ratio plunged 54.77% over 24 hours as of writing, reaching 54.69. The drastic drop suggested that transactions were growing stronger than XRP’s prevailing market capitalization.

This development implied an expanding network utilization relative to valuation, even though the ratio alone could not confirm undervaluation.

More importantly, the higher relative transaction activity provided another possible basis for recovery, alongside the declining exchange reserves. However, XRP still had to gain more buying momentum to capitalize on these moves and push prices higher.

XRP defends support, but bears threaten recovery

Despite the supportive supply-side developments, XRP’s technical structure continued reflecting bearish pressure following its recent decline.

On the daily timeframe chart, the bulls decisively defended the $1.23 support level, allowing XRP to rebound toward $1.24. The Relative Strength Index indicator, however, remained weak at 36.55 at press time, below its Moving Average of 40.19.

Furthermore, the Money Flow Index (MFI) stabilized around 42.31, implying that buying pressure was yet to regain dominance. However, XRP’s declining exchange reserves and persistent outflows introduced potential support for a recovery attempt. 

The weak technical indicators continued threatening immediate gains, but maintaining the $1.2352 could help buyers challenge higher price levels.

Final Summary

• XRP exchange reserves declined by 250 million tokens across Binance, Bybit, and Bithumb.

• XRP defended $1.23 support, but weak indicators threatened a stronger price recovery.