In recent weeks, XRP’s technical outlook has weakened, with its price retesting the long-term demand zone below $1.90. Attempts to rise have been short-lived, highlighting the fragility of the current structure. Meanwhile, a notable contraction in the XRP reserves on Binance has been recorded, hitting the lowest level in six months. This divergence between technical weakness and on-chain data raises the question of where the selling pressure might be exhausted.
Binance Reserves at a Six-Month Low
Data shared by CryptoQuant analyst CryptoOnchain indicates a decline in XRP balances held in Binance wallets, dropping to approximately 2.66 billion units. The XRP Ledger Exchange Reserve graph suggests that such a low level on the exchange has not been seen since July 2024. This scenario hints at the withdrawal of liquid supply from trading platforms, moving into cold wallets, and subsequently causing a contraction in the amount available for sale.
Historically, sharp declines in exchange reserves have often prepared the ground for stability or rebound rallies in the medium term. When the supply ready for sale declines, even relatively limited buying demand can have a disproportionate impact on the price. Instances during periods of extreme market pessimism have resulted in relief rallies.
Price Testing a Critical Demand Zone
As of the writing of this analysis, XRP is trading around $1.87. The price is gradually testing the strong demand zone in the $1.80–$1.90 range, a region that has previously formed the base of a broad upward structure. Daily indicators, like the Relative Strength Index (RSI), hover near the lower band, suggesting a weakening of selling pressure compared to previous weeks. However, a clear confirmation of reversal is yet to be seen.
The weekly chart paints a more deteriorated picture. Since the peak zone between $3.40 and $3.60, successive lower highs and lows have formed. The short-term weekly average has turned downwards, transforming the $2.40–$2.60 range into a strong resistance area. Although long-term averages remain below the price, the loss of momentum in recent months has significantly weakened the medium to long-term structure.
Possible Scenarios: Bounce or Breakdown?
- Bounce from Support: The $1.80–$1.90 band is the last major demand area that bulls need to defend. If weekly closes remain above this area, the contraction in supply on exchanges could strengthen the likelihood of a sharp short-term rebound. The restriction of liquid supply, along with sudden spot purchases and closing squeezed short positions, might boost momentum.
- Downward Breakdown: A significant and sustained breakdown below $1.80 could open the structure to a deeper correction around $1.50.
- Recovery Threshold: Regaining the $2.20–$2.40 band and maintaining it as support is critical for the weekly weakening scenario to have a chance at gradual recovery.
The decline in volume suggests the presence of fatigued sellers rather than new buyers. The simultaneous occurrence of technical pressure and supply contraction indicates that a decision point for XRP is near.
