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XRP exchange reserves have experienced a significant decline across major platforms, signaling a potential supply shock in the cryptocurrency market.
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This movement suggests a strategic shift by large holders, possibly moving tokens into self-custody or over-the-counter transactions, indicating longer-term holding rather than immediate selling pressure.
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According to COINOTAG analyst Chad Steingraber, the rapid depletion of XRP on exchanges like Upbit, Bitstamp, and Binance is unprecedented and could impact liquidity and price volatility in the near term.
XRP exchange reserves drop sharply on major platforms, hinting at a supply shock as tokens move off exchanges into self-custody or OTC deals, affecting market liquidity.
Major XRP Exchanges See Dramatic Reserve Declines Amid Market Shifts
In recent weeks, XRP balances on leading exchanges such as South Korea’s Upbit, Bitstamp, and Binance have plunged drastically. Upbit’s XRP reserves fell from a steady 60-65 billion tokens to approximately 18 billion by mid-June, a reduction that is both sudden and significant. Bitstamp, a veteran in the crypto exchange space, saw its XRP holdings drop from 50-60 million to just under 10 million. Binance, the largest exchange by volume, recorded a decrease from nearly 2.9 billion XRP to about 2.2 billion. This consistent downward trend across multiple platforms suggests a coordinated or market-driven exodus of XRP tokens from centralized exchanges.
Implications of XRP Moving to Self-Custody and OTC Desks
Market analysts interpret the mass withdrawal of XRP from exchanges as a move towards self-custody wallets or over-the-counter (OTC) desks. This behavior typically signals a shift from short-term trading to long-term holding strategies. Unlike spot market sell-offs, which would likely depress prices sharply, the XRP price only dipped modestly from its usual $2–$3.25 range to around $2.16, indicating that tokens are not flooding the order books. Instead, holders appear to be consolidating their assets off-exchange, potentially preparing for future strategic moves or safeguarding against market volatility.
On-Chain Data Reveals Concentration of XRP Holdings and Decentralization Concerns
Blockchain data highlights that a significant portion of XRP is concentrated in a few large wallets, many linked to Binance, including the notable XRP-BF2 address and Ripple’s time-locked escrow contracts. One Binance-associated wallet alone controls approximately 1.46 billion XRP, representing about 1.46% of the total supply. This concentration raises ongoing questions about the true decentralization of XRP’s circulating supply and its impact on market dynamics. The clustering of tokens in large wallets could influence liquidity and price stability, especially if these holders decide to move or liquidate their positions.
Potential Market Outcomes and Trader Responses
The future trajectory of XRP’s market liquidity hinges on whether the withdrawal trend continues or reverses. If tokens remain in cold storage, the reduced exchange supply could tighten liquidity, increasing the likelihood of price volatility and sudden swings. Conversely, if these tokens re-enter exchange order books or appear on alternative trading venues, the supply shock may be temporary, with limited long-term price impact. Traders and investors are closely monitoring on-chain metrics and exchange reserves to gauge market sentiment and adjust their strategies accordingly.
Conclusion
The sharp decline in XRP exchange reserves across major platforms underscores a significant shift in token custody and market behavior. While the movement to self-custody and OTC channels suggests confidence in long-term holding, it also introduces potential liquidity constraints that could amplify price fluctuations. Market participants should remain vigilant, leveraging on-chain data and exchange trends to navigate the evolving XRP landscape effectively.
