Binance’s XRP reserves have quietly fallen to their lowest levels since early 2024 — and the timing feels hard to ignore.
Just as liquidity on the exchange started thinning out, XRP jumped 4.5%, pushing toward the $1.50 mark. That kind of move doesn’t usually happen in isolation.
On-chain data shows Binance now holds around 2.5 billion XRP. Back in November 2024, that number was closer to 3.2 billion. That means roughly 700 million tokens — about 22% of the exchange’s XRP balance — have left in a little over a year.
When coins move off exchanges, they typically head into cold storage or long-term custody. That’s not what short-term traders usually do — it’s more common among larger players positioning for the bigger picture. And when exchange balances shrink, it reduces the amount of XRP readily available to sell. In simple terms: less supply sitting on exchanges often means less immediate selling pressure.
What makes this more interesting is the backdrop. The reserve decline accelerated shortly after Binance rolled out full XRPL support for RLUSD. Many expected that development to increase on-chain activity. Instead, XRP itself started flowing out of the exchange.
At the same time, market sentiment is gradually shifting bullish again. When supply tightens while demand begins to wake up, price reactions can accelerate quickly. That combination — shrinking exchange balances and strengthening momentum — is getting harder for traders to dismiss.
Is a Supply Shock Building?
The scale of the shift isn’t minor. A 700 million XRP reduction is significant, especially if demand continues to build. Analysts often view declining exchange reserves as a classic accumulation signal. It suggests holders may be preparing for longer-term upside rather than short-term selling.
If that trend continues, the market could start feeling a genuine supply squeeze.
The Short Squeeze Angle
Funding rates add another layer to the story. XRP’s funding recently dropped to 10-month lows — a reset that has historically preceded strong upward moves. When funding cools off, it often means excessive leverage has been flushed out.
If short positions start crowding in while exchange supply keeps shrinking, a decisive break above $1.55 could trigger a squeeze scenario. In that case, a move toward $1.80 wouldn’t be unrealistic.
There’s also improving regulatory sentiment in the background, with Ripple’s leadership becoming more visible in Washington. That shift in tone has helped stabilize broader confidence around XRP.
For now, $1.45 remains a key level. If price can hold that area while reserves continue to decline, it would offer the kind of confirmation bulls are looking for before targeting higher levels.
