XRP Exchange Reserves Sink to <8-Year Low>: History Exposes Flaw in Hype

XRP exchange balances have dropped to their lowest point in eight years. This news has sparked excitement among traders who see it as a sign of an upcoming big rally. They claim . But does history back this up? Fresh data from key platforms tells a different story.

What the Data Shows: An 8-Year Trough

On-chain analytics reveal XRP holdings on exchanges hit a multi-year low in late December. Total balances across all platforms are now at levels not seen since 2018. This thin supply often fuels talk of accumulation and price explosions.

Zooming in on Binance, the largest exchange by volume, paints a clearer picture. Reserves fell to about 2.6 billion XRP by mid-December 2025. This matches the July 2024 bottom after peaking above 3.5 billion in early September.

Low reserves mean fewer coins available for quick trades. But the real question is: Do these lows predict rallies, or just less selling pressure during pullbacks?

July 2024: A Choppy Lesson from History

Let’s look back at the last similar low on Binance. Reserves built up from 2.6 billion early in 2024 to over 3 billion by late March. Then they slid to 2.7 billion in July.

During Q2 2024, XRP price stayed range-bound between $0.48 and $0.71, averaging $0.56. It dipped to the low $0.50s in May and hugged $0.50 in June.

The big rally came later. From sub-$1 in October 2024, XRP surged to $2 in November and over $3 in January 2025. Monthly closes: $0.51 (Oct), $1.94 (Nov), $2.08 (Dec), $3.04 (Jan).

Key point: The rally followed months of sideways action and reserves climbing back above 3 billion. The tight supply low itself did not spark the move.

Post-Rally Tightenings: No Quick Wins

After the late 2024 surge, Binance reserves stayed high above 3.2 billion in October-November. They then dropped to 2.8 billion by March 2025.

Price cooled off: $2.08 close in December 2024, peak at $3.04 in January, then back to low $2s through spring. Reserves fell as prices did, signaling profit-taking and moves to self-custody, not a squeeze.

The Current Drop: Tight Supply Meets Weak Price

Now, reserves spiked on September 1 across exchanges, with Binance jumping from 2.93 billion to 3.54 billion XRP. Since October, they’ve fallen to 2.6-2.7 billion—the lowest since July 2024.

Price action? Monthly closes slid from $2.85 (Sep) to $2.51 (Oct), $2.16 (Nov), $2.03 (Dec). That’s a 30% drop amid tightening supply. Spot price now lingers in $1.80-$2.00.

This looks like reduced liquidity in a correction, not a rally setup. Only two true lows near current levels: July 2024 (choppy then delayed rally) and now.

ETFs and Whales Add Layers of Complexity

XRP spot ETFs have pulled in over $1 billion net, with $1.25 billion AUM and no outflows through late 2025. Coins move to custodial wallets, thinning exchange supply structurally—not just from retail buys.

Whale moves muddy the waters. Large holders dumped millions even as ETFs absorbed supply and reserves fell.

• July 2024 low: Pre-ETFs, pure market dynamics.
• Today: ETF demand plus whale sales create mixed signals.

Lessons from Patterns: Necessary, But Not Enough

Every tightening in 2024-2025 led to sideways/lower prices or delayed rallies. The July case needed patience through chop and reserve rebuilds.

Low exchange supply sets the stage by limiting sell-side pressure. But history shows it’s necessary but insufficient for upside. No mechanical path.

When a catalyst hits—like regulatory wins, more adoption, or macro shifts—thin supply could amplify gains. Timing? Uncertain: 30, 90, or 180 days out.

Final Take: Stay Cautious Amid the Hype

XRP’s <8-year low> on exchanges is noteworthy. It reduces available float for sellers. Yet data debunks instant moon dreams. Watch for reserve rebuilds, ETF flows, and whale trends alongside price.

In crypto, thin supply helps winners run harder. But without demand spark, it just means quieter corrections. DYOR and trade smart.

Image: Conceptual chart of XRP reserves vs price (AI-generated elements).