[Analysis] "Binance’s XRP holdings fall to a two-year low…a signal of easing sell-side pressure"

As the price of XRP continues to trend lower, an analysis suggests that a decline in holdings on major exchanges could lead to a shift in supply-demand dynamics going forward.

According to NewsBTC, a cryptocurrency-focused outlet, on-chain analyst CryptoOnchain cited CryptoQuant’s “XRP Ledger: Exchange Reserves – Binance” metric, saying XRP holdings on Binance have recently fallen to around 2.5 billion tokens. That is the lowest level since early 2024.

Binance’s XRP reserves rose to about 3.2 billion tokens in November 2024 before turning downward. Compared with the latest figure, more than 700 million tokens have effectively left the exchange.

Typically, large transfers of assets to exchanges are interpreted as a sign of positioning to sell. Conversely, declining exchange reserves can be read as a reduction in potential sell supply and a signal that investors are opting to hold for the longer term.

CryptoOnchain said that “a drop in exchange reserves means reduced sell-side liquidity in the short term,” adding that “historically, falling reserves have often served as a precursor to the start of an accumulation phase.”

The report also raised the possibility that some investors may be moving assets from exchanges to personal wallets (cold wallets). This is seen as a sign of a stronger medium- to long-term holding strategy rather than short-term trading.

The analyst said, “XRP reserves falling to a two-year low suggests that if demand recovers, supply pressure could ease,” adding that “if a rebound emerges, there may be room for a larger price upswing.”