XRP Plunges to Six-Month Low on Binance as Selling Pressure Eases
XRP is navigating a critical juncture, testing a significant long-term demand zone below $1.90 amidst a broader altcoin market downturn. Despite its recent price depreciation, on-chain data reveals a nuanced picture, with exchange reserves on Binance plummeting to a six-month low, suggesting a potential easing of sell-side pressure.
Exchange Reserves Hit Multi-Month Low as XRP Tests Key Demand Zone
On-chain analysis from CryptoQuant highlights a sharp decline in XRP balances held on Binance, reaching approximately 2.66 billion XRP—the lowest recorded since July 2024. Historically, such contractions in exchange reserves are often interpreted as a constructive signal, indicating that investors are moving their tokens off exchanges into self-custody. This typically reduces the immediate supply available for sale, potentially leading to decreased sell-side pressure even as price action remains weak. This divergence between declining price and shrinking exchange supply presents a compelling narrative, raising questions about the sustainability of current selling momentum. Current price action sees XRP testing the crucial $1.80-$1.90 demand zone, a level that has historically provided structural support for bullish movements. Technical indicators, including the Relative Strength Index (RSI) in the lower range, suggest that bearish pressure might be fading, though a confirmed reversal has yet to materialize. Should buyers successfully defend the $1.80 level, the reduced liquid supply could fuel a sharp recovery. Conversely, a decisive weekly close below this critical threshold would undermine the bullish on-chain thesis, potentially exposing XRP to further declines towards the $1.50 area or lower.
Technical Weakness Persists Despite Supply Contraction
From a broader technical perspective, XRP's weekly chart paints a picture of prolonged correction. After peaking in the $3.40-$3.60 region, the cryptocurrency has consistently posted lower highs and lower lows, confirming a bearish shift in its medium-to-long-term structure. The price is currently trading firmly below its faster weekly moving averages, which have now flipped to act as resistance around the $2.40-$2.60 zone. While the macro uptrend from previous years technically remains intact, the sharp deterioration in momentum is undeniable. Analysis of trading volume further complicates the outlook. Initial selling activity during the breakdown from the $2.50 mark was robust, but recent weeks have seen a notable decline in volume. This could indicate exhaustion among sellers rather than aggressive accumulation by buyers, suggesting a market in search of equilibrium. For XRP to regain its upward trajectory and challenge higher resistance levels, it would need to convincingly reclaim the $2.20-$2.40 region, transforming former support into new foundational strength. The interplay between on-chain supply dynamics and persistent technical weakness sets the stage for a decisive period for XRP in the coming sessions.
