XRP has been maintaining a significant position above a crucial demand zone that has offered consistent support throughout 2025. The question now is whether this stability, combined with a declining supply on exchanges, could set the stage for a sustained recovery in 2026.
Recent data shows that the XRP supply on exchanges has plummeted to an eight-year low, indicating a marked decrease in selling pressure. As of Tuesday, the XRP balance on exchanges dropped from 3.76 billion tokens on October 8 to just 1.6 billion, a level not seen since August 2018. This sharp decline signals that holders are less inclined to sell, which bodes well for potential price increases. Analyst Levi Rietveld commented on social media, stating, “$XRP supply tightens with about 1.5 Billion left on exchanges. Bullish, grab yours now!”
This supply reduction coincides with historical highs in exchange outflows, with a net change of 1.4 billion XRP recorded on October 19 — the largest surge in history. Such massive outflows typically indicate accumulation by larger holders who are moving tokens into cold storage or investment vehicles, effectively reducing the available supply for immediate sale.
Traders have also pointed out that exchange-traded funds (ETFs) are contributing to the depletion of XRP on exchanges, which may tighten liquidity further. This tightening could help position XRP as an institutional-grade asset by 2026. Analyst Skipper noted, “As liquidity tightens, XRP’s price discovery is fundamentally shifting. XRP is now entering a more structural phase.”
In terms of price performance, XRP is currently well-supported above the $1.78 level. Recent downward movements were halted by buy activity in a key demand zone ranging from $1.60 to $1.84, which has historically provided support. Analysts emphasize that if XRP maintains its position above this support zone, it could lead to significant upward price action, particularly given that this was a price point where investors acquired about 1.87 billion tokens.
However, should XRP fall below the $1.78 support, the chances for recovery in 2026 may diminish. Conversely, a rebound from this area could indicate a bullish signal, potentially leading to a breakout with a target as high as $3.79, according to analyst insights.
While the outlook for XRP remains cautiously optimistic, analysts suggest that any significant upward movement will rely heavily on new bullish catalysts emerging later in the cycle. As cryptocurrency markets continue to evolve, investors are urged to conduct their own research and carefully consider the risks involved.
