Binance sees a sharp drop in XRP liquidity indicators… “Potential trigger for sharp swings up or down”

Exchange liquidity for XRP has fallen sharply, prompting analysis that price volatility could widen going forward.

According to CryptoPotato, a digital-asset (cryptocurrency) media outlet, on the 6th a crypto analyst named Arthur said that “XRP’s 30-day liquidity index on Binance has effectively fallen to near ‘zero.’” Trading volume has also dropped steeply after peaking above $200 billion in January last year, indicating liquidity has now markedly tightened.

The analysis suggests the current market can be read in two ways. With thin circulating supply, an inflow of buying could send prices sharply higher; but if it is simply the result of weakening demand, a directionless sideways trend could persist.

It also noted that past cases have tended to be followed by large price moves either upward or downward after liquidity fell to extremely low levels.

Meanwhile, XRP is trading at around $1.34 on the day. It is up 3.2% over the past 24 hours, but slightly down on a weekly basis. It also remains more than about 60% below the all-time high recorded last July.

The market is also pointing to ETF fund flows as a variable alongside the liquidity decline. XRP spot ETFs posted their first net outflow last month, and on some trading days no inflows were recorded at all. As a result, analysis suggests that short-term supply-demand imbalances could amplify price volatility.