TLDR:
- XRP ETFs have absorbed significant supply, reducing the amount of XRP readily available on centralized exchanges
- Exchange balances have declined steadily, reflecting long-term holding behavior and reduced immediate sell pressure
- Price remains bearish, but momentum indicators show selling pressure is weakening on higher timeframes
- The three-day MACD suggests stabilization as downside momentum contracts near deeply negative levels
XRP ETFs supply shock narratives are gaining attention as exchange balances decline and momentum indicators stabilize.
Recent data shows reduced liquid supply, weakening sell pressure, and a maturing bearish structure on higher timeframes.
XRP Exchange Balances Signal Structural Supply Tightening
The exchange balance indicator shows a steady reduction in XRP held on centralized trading venues. Early readings near four billion XRP reflected strong liquidity and trading readiness. Over time, balances declined in waves, reflecting repeated withdrawals.
Short-term increases were followed by sharper drawdowns, suggesting distribution phases rather than random movement.
These patterns often appear when holders shift toward long-term custody. The behavior points to reduced immediate sell availability across exchanges.
From October through December, outflows accelerated and became more aggressive. This steep decline coincided with a broader market downturn. Historically, sustained exchange outflows reduce sell-side liquidity, though demand strength remains decisive for price direction.
XRP ETFs absorbed around 750 million tokens within weeks. The same post noted only about 1.5 billion XRP remaining on exchanges. The message framed this trend as a potential supply shock forming in 2026.
Falling balances during price weakness can also reflect reduced speculative interest. This combination suggests a structural shift in holding behavior rather than short-term trading activity.
Overall, exchange data shows a tightening liquid supply environment. The XRP ETFs supply shock theme draws support from these metrics.
XRP Price Action and MACD Point to a Decision Zone
XRP price action on the three-day chart remains firmly bearish. Lower highs and lower lows define the structure from the $3.50 region to near $1.85. Sellers have controlled each rebound and have weakened all bullish approaches.
Recent candles show compressed bodies and shorter wicks, reflecting slowing downside momentum. Such compression often appears when trends mature and volatility contracts.
The MACD indicator remains below the zero line, confirming the prevailing bearish trend. However, the histogram has been steadily contracting toward neutral levels.
The MACD line is curling upward, positioning for a potential bullish crossover attempt. On higher timeframes, such formations often precede consolidation phases.
The crossover attempt is forming at deeply negative levels, and its relevance will be confirmed. Momentum typically shifts before price reacts. Still, confirmation requires price holding above recent lows.
The XRP ETFs supply shock narrative intersects here, as reduced liquid supply meets weakening selling momentum. Indicators currently suggest stabilization.
The post XRP ETFs Supply Shock Looms as Exchange Balances Drop to 1.5B appeared first on Blockonomi.
Source: https://blockonomi.com/xrp-etfs-supply-shock-looms-as-exchange-balances-drop-to-1-5b/
