Ripple’s XRP has shown a notable increase, rising by 1.07% to reach $1.87 within a 24-hour period. This performance outstrips the broader cryptocurrency market, which recorded a modest gain of 0.54%. The price movement of XRP underlines a mixed sentiment among investors alongside a tightening of supply, boosting its market capitalization to approximately $112.55 billion. Additionally, trading volume saw a significant uptick, increasing by 4.24% to $1.07 billion.
The recent rise follows a critical evaluation of support levels, with trading data indicating that investors have been actively defending the $1.86 Fibonacci support. This zone has proven resilient since the pre-holiday trading sessions, signifying a defensive stance by market participants. Reports suggest that institutional buyers might be amassing XRP at this technical level, reflecting an oversold condition, particularly as the asset has experienced a 15% decline year-to-date.
The tightening supply of XRP on exchanges stems largely from the absorption of large amounts by spot XRP ETFs. Concurrently, larger holders are moving their assets into self-custody, which further diminishes the available inventory on trading platforms. On Sunday alone, spot XRP ETFs recorded cumulative inflows of $756 million, while futures open interest on Binance dropped to a low of $450 million, having previously peaked at $1.1 billion.
These developments indicate that institutional investors are increasingly utilizing regulated ETFs for accumulation, while leveraged traders are opting to exit their positions, thereby alleviating some of the selling pressure. Current ETF holdings represent approximately 12.8% of the circulating supply of XRP, contributing to a structural demand that may influence price stability.
The ongoing tightening of XRP exchange supply is primarily attributed to sustained inflows into spot ETFs and the movement of coins into long-term custody. Since their launch, spot XRP ETFs have collectively attracted around $1.14 billion, significantly constraining the liquid supply available on exchanges. Major players in the ETF market—including Canary, 21Shares, Grayscale, Bitwise, and Franklin Templeton—have reportedly accepted over $750 million of XRP, creating a scarcity that can lead to heightened price sensitivity.
On-chain data reveals a decline in exchange reserves, with Binance’s balances now standing at approximately 2.66 billion XRP, marking the lowest levels since July 2024. This trend indicates that coins are being withdrawn from exchanges for long-term holding, which further diminishes immediate liquidity for sales. Recent reports indicate that the total XRP available on exchanges has contracted sharply to around 1.5 billion XRP, setting the groundwork for increased price responsiveness if demand continues to rise.
