adminIn recent developments, xRP is testing a critical long-term demand zone below the $1.90 level as market conditions continue to deteriorate across the altcoin sector. After failing to sustain upside momentum, price action has turned increasingly fragile, with bulls struggling to defend key support levels. The structure now reflects growing weakness, reinforcing concerns that the broader market may be transitioning into a bearish phase that leaves altcoins exposed to deeper drawdowns. Despite the softening price action, on-chain data is sending a more nuanced signal. A recent CryptoQuant report by CryptoOnchain highlights a sharp decline in XRP exchange reserves on Binance, even as price has continued to correct. Historically, falling exchange balances suggest that fewer tokens are being held on platforms where they can be readily sold, often pointing to reduced sell-side pressure rather than aggressive distribution. This divergence between price behavior and on-chain supply dynamics is particularly notable at current levels. While XRP’s chart suggests that buyers are losing control in the short term, the contraction in exchange reserves raises questions about how much selling pressure remains if price continues to slide. In past market cycles, similar conditions have preceded periods of stabilization or relief rallies, especially when broader sentiment becomes excessively pessimistic. As XRP hovers below $1.90, the coming sessions will be decisive. Whether shrinking exchange supply can offset weakening technicals will determine if XRP finds a base or extends its decline alongside the wider altcoin market. Exchange Reserves Hit Multi-Month Low as XRP Tests Key Demand Zone On-chain data is highlighting a notable shift in XRP’s supply dynamics at a critical moment for price action. According to the XRP Ledger Exchange Reserve chart, XRP balances held on Binance have dropped sharply to around 2.66 billion XRP. This represents the lowest exchange balance recorded since July 2024, signaling a meaningful contraction in the amount of XRP readily available for sale on the market. Historically, such declines in exchange reserves are interpreted as a constructive signal. They indicate that investors and larger holders are moving tokens off exchanges into self-custody, reducing immediate sell-side liquidity. When the supply available for trading shrinks, even modest demand can have a disproportionate impact on price, creating the conditions for a potential supply-driven move. This on-chain development is unfolding as XRP trades at a technically sensitive level. Price is currently testing the major demand zone between $1.80 and $1.90, an area that has previously acted as a foundation for broader bullish structure. Momentum indicators add context, with the RSI sitting in the lower range, suggesting bearish pressure is fading, though a confirmed reversal has yet to materialize. The alignment of declining exchange supply and strong technical support strengthens the case for a potential stabilization or rebound. If buyers successfully defend the $1.80 level, reduced liquid supply could fuel a sharp recovery. However, a decisive breakdown below this zone would undermine the bullish on-chain thesis and reopen downside risk. XRP Tests Long-Term Demand as Weekly Structure Weakens XRP is trading near the $1.87 level on the weekly chart, extending a prolonged corrective move that has eroded much of the bullish momentum built earlier in the cycle. After topping above the $3.40–$3.60 region, price has consistently printed lower highs and lower lows, confirming a clear shift toward a bearish medium- to long-term structure. The latest weekly candles show sustained selling pressure with limited downside wicks, suggesting weak dip-buying interest at current levels. From a trend perspective, XRP has lost its key weekly moving averages. Price is now firmly below the faster weekly average, which has rolled over and turned into resistance around the $2.40–$2.60 zone. The longer-term moving averages remain well below the current price, indicating that while the macro uptrend from prior years is technically intact, momentum has deteriorated sharply. The $1.80–$1.90 area stands out as a critical demand zone. This region has acted as structural support in the past and now represents the last meaningful level bulls must defend to avoid a deeper breakdown. A sustained weekly close below $1.80 would significantly weaken the broader structure and expose XRP to a move toward the $1.50 area or lower. Selling activity increased during the breakdown from $2.50, while recent weeks have shown declining volume, pointing to exhaustion rather than accumulation. For XRP to regain strength, price would need to reclaim the $2.20–$2.40 region and establish acceptance above former support-turned-resistance. Featured image from ChatGPT, chart from TradingView.com
Looking closer, market participants highlight key drivers such as liquidity flows, macro risk appetite, regulatory headlines, and on-chain activity. Short-term swings often reflect liquidation cascades and funding imbalances, while spot volumes and exchange inflows set the broader tone.
Analysis: The medium-term picture hinges on whether buyers can sustain momentum without excessive leverage. If flows continue favoring majors like BTC and ETH, altcoins could experience a staggered rotation instead of a broad-based rally. Meanwhile, policy clarity in key jurisdictions remains a decisive catalyst; clearer rules typically compress risk premia and attract institutional allocations. Beyond price action, on-chain metrics such as active addresses, fees, and stablecoin velocity help validate trend strength.
Outlook: Over the next few weeks, observers will watch price acceptance above recent resistance, derivatives positioning, and ETF-related flows. A constructive setup would feature rising spot demand, contained leverage, and improving breadth across sectors such as DeFi, infrastructure, and Layer-2 ecosystems.
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