XRP Primed for Potential $5 Surge as Exchange Balances Plummet 57%
XRP is at a critical juncture, with expert forecasts suggesting a potential climb to the $4 to $5 range, fueled by a dramatic reduction in its availability on exchanges. This optimistic outlook comes despite recent price pullbacks, as underlying market indicators point towards a significant shift in the cryptocurrency's supply dynamics.
Declining Exchange Supply and Institutional Inflows Bolster Optimism
Market analysis by Sam Daodu highlights a remarkable trend: XRP exchange balances have plummeted by 57%, from roughly 4 billion tokens in early 2025 to approximately 1.5 billion by late December. This marks the steepest annual decline in XRP's recorded history, indicating a substantial migration of tokens off centralized trading platforms into long-term storage and institutional custody. This reduced selling pressure, combined with a robust $1.37 billion in XRP Exchange-Traded Fund (ETF) inflows since November 2025, creates a fertile ground for a price breakout. The theory suggests that with fewer tokens available for immediate trading on exchanges, even modest buying pressure could lead to significant price appreciation.
Navigating Bullish, Neutral, and Bearish Price Scenarios
Analyst Daodu outlines various potential price trajectories for XRP, contingent on these market forces:
Bullish Momentum Towards $4-$5
The most bullish scenario projects XRP reaching the $4 to $5 range. This is anticipated if monthly ETF inflows average $300-$500 million and exchange balances continue their descent, falling below 1.5 billion tokens. These conditions would signify strong institutional and long-term investor confidence, driving demand against a constrained supply.
Moderate Growth and Bearish Retracement
A more neutral outcome would see XRP trading between $2.50 and $3.50. This hinges on ETF inflows slowing to $50-$70 million per week while exchange balances continue a steady, but not sharp, decline. Conversely, a bearish scenario could see prices fall below $2.00, potentially retesting the $1.60 level. This downturn could occur if the current supply contraction is overestimated, rapid transfers create increased selling pressure, or ETF demand falters due to tightening macroeconomic conditions. Under such circumstances, XRP could remain range-bound between $1.50 and $2.00 for much of 2026. As of the latest reports, XRP is trading around $1.94, having experienced minor losses over the past two weeks and remaining 46% below its July all-time high of $3.64. The coming months will reveal which of these forecasts takes hold as the interplay of institutional interest and dwindling exchange supply continues to shape XRP's market narrative.
