Billions of dollars’ worth of XRP have been transferred out of Binance over the past year, causing significant market reactions. Current on-chain data indicates similarities to the bearish market in early 2022, leading to cautious investor behavior.

XRP Supply Decline on Binance

The XRP reserves on Binance have decreased by almost 45% in just one year. Analyst Niels reported that the reserves fell from $10.16 billion to $5.55 billion, indicating a large volume of XRP being moved to private wallets.

This trend implies that many XRP holders are opting not to sell their assets soon. The ongoing decrease in exchange balances suggests a shift toward long-term storage. As Niels articulated,

“Something big is happening with $XRP supply. Binance alone has seen its XRP reserves drop almost 45% in one year. From $10.16B down to $5.55B. That’s a massive amount of coins leaving exchanges and moving into long-term storage.”

Currently, as observed by Glassnode, XRP’s setup resembles that of early 2022, where prices fell from $0.78 to below $0.30 over time. The data points to newer investors purchasing at levels lower than long-term holders’ positions.

Glassnode further noted,

“Psychological pressure on top buyers continues to build over time.”

This occurs as recent buyers lock in profits, while older investors may face losses. If the prices do not recover, some of these long-term holders may opt to exit the market.

Price Decline Amid Decreased Volume

XRP experienced a peak of $2.40 earlier in January, yet it has retraced back significantly. Recently, it lost the $2 support level and declined to $1.84, recovering to around $1.90. Over the past week, XRP has seen a decline of more than 11% according to CoinGecko.

Analyst Steph Is Crypto stated,

“$XRP price weakness is happening on declining volume — just like 2021–2022.”

A diminishing trading volume during a downward trend indicates waning buyer interest, potentially slowing market momentum.

Furthermore, XRP-related ETFs in the US recorded their largest outflows yet this week. Recent data shows investor engagement has sharply decreased, with more capital exiting the market amid global tensions and economic uncertainty.

Observations on Market Compression

Analyst Egrag Crypto shared a chart of the XRP/BTC relationship showcasing pressed price movement and closely aligned moving averages. This situation, termed compression, often leads to significant movements once a clear direction is established.

Egrag explained,

“This is not noise. This is structure tightening.”

Current trends show XRP oscillating between support and resistance, identified by analysts as a constructive phase, indicating potential accumulation in anticipation of future price movements.