XRP Supply Dwindles While ETFs Go On A Buying Spree Before 2026

Overview

XRP is currently navigating a critical phase in its structural evolution, characterized by a significant decline in its supply on centralized exchanges. While the price trend remains bearish and overall market sentiment is cautious, on-chain data indicates a contrasting narrative, suggesting potential shifts in the altcoin’s dynamics as it heads towards 2026.

Declining XRP Supply on Exchanges

Recent data from Glassnode reveals that XRP balances on centralized exchanges have plummeted to approximately 1.5 billion XRP, marking the lowest level seen in over a year. This decline is notable against a backdrop of bearish price action and a broader cautious sentiment across the cryptocurrency market. Earlier in the year, around 4 billion XRP were held on centralized platforms, but this figure has steadily decreased, particularly in the fourth quarter of 2025.

The reduction in exchange-held XRP is significant as it occurs even amid a downturn in XRP’s price. This suggests that while some holders are liquidating their assets, a considerable number are opting to transfer their tokens into long-term custody. Such a trend is crucial for fostering bullish momentum, as diminishing exchange balances can alleviate near-term selling pressure, thereby making the cryptocurrency more responsive to any incoming demand.

Accumulation by XRP ETFs

At the forefront of this supply contraction are newly launched US-based Spot XRP ETFs, which have emerged as a substantial source of demand. Market estimates suggest that these six Spot ETF products have absorbed around 750 million XRP since the debut of the first ETF in November. As these ETFs continue to withdraw XRP from exchanges, the available liquid supply in the spot market keeps diminishing. This evolving dynamic may not trigger an immediate price reaction but is expected to alter the supply-demand balance, potentially influencing XRP’s performance in 2026.

Technical Analysis and Support Levels

In addition to the on-chain supply data, technical indicators reflect a similar tightening theme. Analyst Steph Is Crypto has identified that XRP is currently positioned within a significant horizontal support zone on the weekly timeframe. The price has been compressing into the $1.90 to $2.00 range following a prolonged decline from mid-2025 highs near $3.50. This level previously served as a launch point during earlier cycles.

Moreover, the weekly Stochastic RSI has entered extreme oversold territory, indicating that the selling pressure has likely exhausted much of its momentum. Historically, turning points in price action tend to emerge when downside momentum is depleted, and sellers have little energy left to drive prices lower. This suggests a potential transition towards bullish momentum for XRP as it approaches early 2026.

From author

The convergence of declining supply on exchanges and the accumulation by ETFs positions XRP uniquely in the market. While the current price sentiment remains bearish, the structural changes indicated by on-chain data and technical analysis could pave the way for a significant shift in the coming years. As the cryptocurrency landscape evolves, XRP’s ability to respond to these dynamics will be closely watched by market participants.

Impact on the crypto market

• The reduction in XRP supply on exchanges may lead to decreased selling pressure, potentially allowing for price appreciation if demand increases.
• The accumulation of XRP by ETFs signifies growing institutional interest, which could enhance market confidence.
• Technical indicators suggest that XRP may be nearing a turning point, which could attract more traders and investors.
• The interplay between declining supply and ETF demand could create a more favorable environment for price recovery in the coming years.
• Overall market sentiment could shift positively if XRP begins to show signs of bullish momentum, impacting broader crypto market dynamics.