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Ripple (XRP) Supply on Exchanges Drops to Seven-Month Low, Price Fails to React

2 mins
Updated by Daria Krasnova
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In Brief

  • Ripple's XRP supply on exchanges has dropped 28% since February, hitting a seven-month low.
  • Despite reduced selling pressure, XRP's price has plummeted 24% from its March peak of $0.71.
  • XRP trades within a price channel, with the potential for either a recovery or further decline.
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Since February, the amount of Ripple’s XRP held on cryptocurrency exchanges has been steadily declining, typically a sign of reduced selling pressure, which can often lead to price increases.

However, despite this trend, XRP’s price has continued to fall, defying the usual expectations of a price boost under such conditions.

Ripple’s Reaction Muted Despite Fall in Selling Pressure

As of this writing, 2.58 million XRP tokens, valued at $1.32 million at current market prices, are held on cryptocurrency exchanges. According to Santiment, this amount has decreased by 28% since February 1.

When the supply of an asset on exchanges decreases, it generally signals that fewer units are available for immediate sale, as investors choose to hold onto their tokens. This typically reduces selling pressure and can drive the price up.

Read more: 7 Best Crypto Contract Trading Platforms in 2024

the supply of xrp tokens on exchanges
XRP Supply on Exchanges. Source: Santiment

However, for this to happen, there must be a corresponding surge in demand. In XRP’s case, this surge in demand has been lacking, despite the reduced exchange-held supply.

Since reaching a year-to-date high of $0.71 on March 11, XRP has moved downward, with its value dropping 24%, now trading at $0.53. This price decline has also affected the percentage of XRP’s total supply held in profit.

xrp price

XRP Price. Source: Santiment

On March 11, 91.21% of XRP’s supply was in profit. However, as the token’s price fell, this percentage plunged to a 16-month low of 67.38% by July 4.

Fortunately, there has been a rebound, with the figure now recovering to 76.79%, per Santiment’s data.

XRP Total Supply in Profit.
XRP Total Supply in Profit. Source: Santiment

XRP Price Prediction: Token Attempts to Retest Support

Ripple’s price movements on the one-day chart show that the altcoin has been trading within a horizontal channel since July 17. This pattern occurs when an asset’s price moves within a set range, with the upper line acting as resistance and the lower line as support.

XRP’s price fell below the channel’s lower support line on September 5 but has since begun to rally. This indicates a retest of the former support, which will only be successful if demand for XRP remains strong.

Read more: 10 Best Altcoin Exchanges In 2024

xrp price prediction
XRP Price Analysis. Source: TradingView

If the retest holds, XRP could resume its uptrend, with price targets of $0.56 and potentially $0.60. However, if the retest fails, the price could drop to $0.46, invalidating the bullish outlook.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Abiodun Oladokun
Abiodun Oladokun is a technical and on-chain analyst at BeInCrypto, where he specializes in market reports on cryptocurrencies from diverse sectors, including decentralized finance (DeFi), real-world assets (RWA), artificial intelligence (AI), decentralized physical infrastructure networks (DePIN), Layer 2s, and meme coins. Previously, he conducted market analysis and technical assessments of various altcoins at AMBCrypto, utilizing on-chain analytics platforms like Messari, Santiment...
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