Over the past year, Binance has experienced a noticeable reduction in its XRP holdings, with billions of dollars in the cryptocurrency moving off the exchange. This substantial shift is capturing attention within the crypto market. Analyst Niels reports that Binance’s XRP reserves have decreased by nearly 45%, from $10.16 billion to $5.55 billion in just 12 months. This trend indicates a major transfer of XRP from the exchange into private wallets, suggesting a reduced interest in selling among holders for the near future.
On-chain data from Glassnode highlights that XRP’s current market structure resembles that of early 2022 when prices significantly dropped. At that time, XRP prices fell from $0.78 to below $0.30 over several months. The current market conditions show newer investors acquiring XRP at lower prices than long-term holders, building psychological pressure on top buyers. If prices fail to recover, some long-term investors might decide to sell their holdings.
Since mid-2025, the $2 price level has triggered substantial realized losses, according to Glassnode. This price point has consistently aligned with losses ranging from $500 million to $1.2 billion weekly, marking it as a critical level where many traders choose to exit.
Despite reaching a multi-month high above $2.40 earlier this month, XRP has recently declined, losing its $2 support and dropping to $1.84 before recovering to around $1.90. According to CoinGecko data, XRP has decreased by over 11% in the past week. Analyst Steph Is Crypto notes that the price weakness is accompanied by declining trading volumes, reminiscent of trends seen in 2021–2022. A decrease in trading volume during a downtrend can indicate waning buyer interest, further slowing momentum.
Additionally, U.S.-based XRP ETFs reported their largest outflows this week, with significant investor activity pulling back amidst rising global tensions and economic uncertainties. The decrease in interest reflects broader market concerns.
In the context of market dynamics, analyst Egrag Crypto observes a pattern of compressed price action in the XRP/BTC pairing, alongside tight moving averages. This scenario, known as compression, can potentially lead to expansion when a clear trend emerges. Egrag describes the current situation as a “bullish rectangle,” suggesting a potential accumulation phase following a decline, although the uptrend is not yet confirmed.
The ongoing changes in XRP supply on exchanges and market conditions remain a focus for investors as they navigate the evolving landscape. The future movements of XRP will depend on various factors, including market sentiment and broader economic conditions.
The decline in XRP holdings on Binance coincides with broader market trends affecting cryptocurrencies. Since January 2026, the crypto market has faced challenges, with economic factors such as inflation and interest rate hikes exerting pressure on digital asset prices. These elements have contributed to a cautious approach among investors, as highlighted by various market analysts.
Furthermore, the interplay between XRP’s price movements and investor sentiment is evident in the behavior of large holders. According to Glassnode data, the reduction in XRP supply on exchanges suggests that major holders are opting for long-term storage, potentially anticipating future price appreciation. This shift in strategy reflects a broader trend among cryptocurrency investors who seek to mitigate risk by holding assets off exchanges.
Despite the current price volatility, some analysts maintain an optimistic outlook for XRP. They point to the potential for increased adoption of Ripple’s technology in cross-border payments as a long-term driver of value. However, the immediate market conditions, marked by substantial outflows and declining prices, present challenges that may influence short-term sentiment.
Egrag Crypto’s analysis of the XRP/BTC chart underscores the importance of technical indicators in assessing market trends. The compression phase observed in the chart suggests that XRP is poised for a potential breakout, although the timing and direction remain uncertain. This technical setup is closely watched by traders looking for signals of market shifts, with the potential for significant price movements if a clear trend emerges.
Market analysts have noted that the shifting dynamics in XRP supply on exchanges like Binance could have broader implications for liquidity and trading strategies. As XRP reserves decrease, the available supply for trading on exchanges becomes limited, potentially leading to increased price volatility. This situation is being closely monitored by traders who are assessing the impact of lower liquidity on their trading decisions.
In the context of market sentiment, the recent outflows from U.S.-based XRP ETFs, which reached record levels this week, underline the cautious approach investors are adopting. The economic uncertainties and global tensions are influencing capital movements, as reported by financial experts. This trend is indicative of a broader reluctance among investors to engage heavily in the crypto market under current conditions.
Furthermore, the psychological impact on XRP holders is becoming evident, as noted by Glassnode. The ongoing price pressure and the failure to sustain key support levels, such as the $2 mark, are contributing to a challenging environment for investors. The combination of realized losses and declining market interest poses significant hurdles for those holding XRP, as they navigate the volatile market landscape.
The recent activity surrounding XRP has sparked discussions among market analysts about the potential implications for the cryptocurrency’s future trajectory. On January 20, 2026, Niels highlighted that the drastic reduction in Binance’s XRP reserves might indicate a shift in investor behavior, with a growing preference for long-term holding strategies. This trend aligns with broader patterns in the crypto market, where investors often move assets off exchanges in anticipation of future gains or to mitigate risk during volatile periods.
Steph Is Crypto, commenting on the current market conditions, noted that the decline in XRP’s trading volume is a critical factor impacting its price momentum. The analyst emphasized that reduced buyer interest, as seen in the current environment, can prolong periods of price weakness. This sentiment is echoed by other market observers who are closely watching trading volume metrics as a key indicator of market sentiment and potential price movements.
Egrag Crypto’s technical analysis of the XRP/BTC chart suggests a phase of accumulation, despite the absence of an immediate uptrend. The analyst’s observation of a “bullish rectangle” formation indicates that XRP may be preparing for a breakout, contingent on market conditions and investor sentiment. This technical setup is being scrutinized by traders who are assessing the potential for significant price shifts once a clear direction emerges.
Furthermore, the correlation between XRP’s price fluctuations and broader economic factors is becoming more apparent. As global economic uncertainties persist, investors are increasingly cautious, influencing capital flows in the crypto market. This caution is reflected in the recent outflows from U.S.-based XRP ETFs, as investors reassess their positions amid rising geopolitical tensions and economic challenges.
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