XRP is showing a historic shift in on‑chain supply dynamics that could reshape market behavior. Exchange balances have dropped sharply, signaling a potential liquidity squeeze.
Chad Steingraber highlighted this trend on X, noting that Glassnode data shows XRP exchange reserves decoupling from historical price correlations for the first time. Balances have fallen to roughly 1.6 billion tokens, even as XRP trades near $2. This marks a structural shift with major implications for market liquidity.
Falling Exchange Balances Signal Tightening Supply
Exchange balances represent XRP held on centralized platforms and immediately available for trading. A decline suggests accumulation into private wallets or institutional custody.
Over the past three weeks, nearly 1 billion XRP left exchanges, driven by ETF inflows exceeding $874 million, institutional holdings, and retail demand. Supply on exchanges has now fallen by 45 percent in just two months.
This reduction tightens the market, limiting sell-side availability. Even moderate buying pressure could now trigger amplified price movements.
Glassnode Exchange XRP Balances
The first time that balances (green) are WELL below the price structure (black). https://t.co/hYDBYF6bTx pic.twitter.com/ryHDrSKqG5
— Chad Steingraber (@ChadSteingraber) December 9, 2025
Implications for Liquidity and Market Behavior
Lower liquidity on exchanges can create stronger support levels. Sellers have fewer tokens to unload quickly, potentially stabilizing price during market stress.
At the same time, reduced supply could magnify buying effects. Institutional or retail purchases may have an outsized impact on XRP price, increasing volatility and potential upside.
Institutional and Retail Accumulation
ETF inflows and institutional custody are major drivers of these withdrawals. Large-scale holders are storing XRP off exchanges for long-term purposes.
Retail investors also contribute, withdrawing tokens to private wallets. These accumulations indicate confidence in XRP’s fundamentals and a potential setup for future upward movement.
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— TimesTabloid (@TimesTabloid1) June 15, 2025
Risks and Market Fragility
Despite tightening supply, structural risks persist. On-chain data shows about 41.5 percent of XRP supply is currently underwater. These holders may sell if prices drop further, creating renewed volatility.
Macroeconomic or market-wide pressures could also affect XRP. Low exchange balances alone cannot prevent price declines if broader sentiment turns negative.
What to Watch Next
Market participants should monitor exchange balances, ETF flows, and large wallet movements. Continuous accumulation off exchanges could push liquidity even lower.
Price support levels and sentiment indicators will also be crucial. A combination of tight supply and strong demand may create conditions for a significant upward move.
In conclusion, Glassnode data, highlighted by Chad Steingraber, reveals XRP exchange balances falling below historical price correlations for the first time. This signals a tightening market and potential supply squeeze.
ETF inflows, institutional holdings, and retail accumulation continue to reduce tokens available on exchanges. While this dynamic could fuel upside momentum, the large portion of XRP held at a loss reminds investors that structural risk remains. Close attention to supply and sentiment trends will be critical in assessing XRP’s next moves.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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