XRP's liquidity on Binance has fallen to its weakest level since 2021, with whale holdings dropping and exchange inflows surging. | Credit: CCN.
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Key Takeaways
XRP’s liquidity index on Binance has dropped to its lowest reading since 2021.
Whales holding between 1 million and 10 million XRP have offloaded 110 million tokens since March 25, while exchange inflows hit a one-month high of 62 million XRP on April 11, signaling rising sell-side intent
A daily close below the 20-day EMA could trigger a near-20% drop to $1.11.
Ripple’s XRP is facing a deepening liquidity drought that could stall any significant near-term price recovery.
A new report from a pseudonymous CryptoQuant analyst reveals that the token’s liquidity on Binance has fallen to its weakest level since 2021.
Deteriorations like this historically precede sharp price corrections. So, what does this mean for XRP holders in the near term?
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The falling volume and waning sentiment have kept the token locked in a sideways trend for several weeks, confirming the contraction in market interest.
When trading volume declines as price struggles, it means the number of active buyers and sellers in the market is waning.
This thins out the order books and drains market liquidity, making it harder to execute large trades without causing sudden price swings.
When that happens, even more traders exit the market to avoid risk, deepening the liquidity decline.
According to Arab Chain:
“The drop in liquidity to its lowest level since 2021 is a significant indicator of changing market dynamics, potentially reflecting a period of investor caution, reduced trading activity, and anticipation of new market catalysts. Periods of low liquidity often precede more pronounced price movements, particularly when liquidity returns to the market.”
On what to expect next when markets fall into a period of low liquidity like this. Arab Chain wrote:
“Periods of low liquidity are typically associated with reduced volatility and quieter price action, as fewer market participants and lower trading volumes prevail.”
However, they also amplify the impact of any sudden shift in sentiment. When buyers or sellers return in force to a thin market, price swings tend to be more severe.
XRP Whales Retreat and Exchange Inflows Rise
On-chain data confirms that pressure may be tilting toward the downside. XRP has seen a dip in large-holder activity amid sideways price action.
Per Santiment data, whales holding between 1 million and 10 million XRP tokens have reduced their holdings by 110 million XRP since March 25.
At press time, this cohort of large investors holds 3.72 billion XRP.
A dip in whale activity often signals waning conviction among the market’s key participants.
When large holders reduce exposure during a period of already-thin liquidity, it removes an important source of demand from the market.
This leaves XRP’s price more vulnerable to downside pressure if broader sentiment deteriorates further.
Furthermore, an assessment of XRP’s exchange activity supports this bearish outlook.
According to Glassnode, XRP’s Exchange Net Position Change registered consistent outflows across several weeks from mid-March through early April, even as price performance remained subdued.
Now, that trend appears to be reversing. Over the past three sessions, steady token inflows into exchanges have been recorded, with the metric surging to a one-month high of 62 million XRP on April 11.
When holders move tokens onto exchanges in large volumes like this, it signals intent to sell. This further heightens the risk of downside pressure on the token.
XRP Bears Strengthen Control
On the daily chart, the altcoin is poised to break below its 20-day exponential moving average (EMA), suggesting new price lows in the near term.
At press time, XRP hovers slightly above this key moving average, which forms dynamic support at $1.35.
The 20-day EMA measures an asset’s average price over the past 20 trading days, giving more weight to recent prices.
Gearing to break below this level suggests sell-side pressure is rising and outpacing demand among market participants.
A daily close below this support line would confirm that bears have regained control of the market and open the door to further losses.
Further, the token’s Balance of Power (BoP) supports this negative outlook. At press time, the indicator reads -0.30, reflecting that sellers are currently outpacing buyers in the market.
The BoP indicator measures the strength of buying versus selling pressure in the market, helping to identify whether bulls or bears dominate price action.
A negative BoP reading, as seen with XRP, indicates that sell-side pressure is strengthening, further increasing the likelihood of more declines.
XRP Risks 20% Drop If Key $1.35 Support Gives Way
The support floor formed by the 20-day EMA at $1.35 is an important level to watch.
A daily close below this level could send XRP toward the lower line of its horizontal channel at $1.31.
A breach of that level could trigger a near-20 % price dip to $1.11, a level last reached in February.
However, if buying pressure returns and the token defends the $1.35 EMA support, a relief rally toward the upper channel line at $1.47 may be possible.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Abiodun Oladokun is a Research Analyst at CCN, where he covers cryptocurrency markets with a focus on on-chain analysis, technical assessments, and emerging trends across decentralized finance (DeFi), real-world assets (RWA), artificial intelligence (AI), decentralized physical infrastructure networks (DePIN), Layer 2s, and meme coins.
Prior to CCN, he served as a Senior On-Chain Analyst at BeInCrypto, producing market reports spanning diverse crypto sectors.
Before that, he conducted technical analysis and market assessments of various altcoins at AMBCrypto, where he also contributed long-form quarterly research papers on DeFi, NFTs, DAOs, and scaling architectures, leveraging on-chain platforms including Messari, Santiment, DefiLlama, and Dune Analytics.
He began his crypto career as a research analyst at SixthSense DAO, developing blockchain forensic tools to trace the history of stolen assets.
Abiodun is a lawyer called to the Nigerian Bar and the founder of Ilé Ijó, a Lagos-based electronic dance music collective.
