YEREVAN (CoinChapter.com) — Binance XRP reserves have experienced a sharp decline, with the latest proof-of-reserves report showing a drop to 2.78 billion XRP as of September 1, 2024. This reduction of 174.89 million XRP compared to the previous month has raised concerns among market observers. Binance, the largest crypto exchange, still provides 100.7% coverage for all user assets, but the shift in reserves signals a trend of users moving out of volatile assets like XRP and into stablecoins.
At the same time, USDT holdings have surged by 4.34%, reflecting a growing preference for stablecoins as the market remains uncertain. This shift is also seen in Bitcoin and Ethereum, which have witnessed reductions of 1.27% and 4.58% in user-held reserves on Binance.
Binance Asset Reserve Ratios. Source: Binance Proof-of-Reserves XRP Whales Transfer 100 Million Tokens, Sparking Market Speculation
Amid this broader trend, XRP whales have also started to shift their holdings. According to Whale Alert, more than 100 million XRP tokens, worth approximately $52.9 million, were transferred between two unknown wallets. This significant movement has raised speculation, although it is not considered a sell-off since the transaction did not involve any crypto exchange. Whale movements like this one can have an impact on market sentiment, often leading to increased speculation among XRP holders. Such activity suggests that whales might be strategically repositioning their assets amidst the ongoing market volatility.
Whale Alert: 100 Million XRP Transferred Between Unknown Wallets. Source: @whale_alert XRP Supply on Exchanges Hits Seven-Month Low, But Price Fails to React
Adding to the concern, the XRP supply on exchanges has dropped by 28% since February 2024, reaching its lowest point in seven months. Typically, a reduction in exchange-held XRP signals reduced selling pressure, which can support price increases. However, despite this decline in available supply, XRP price has not reacted as expected.
The current XRP price is $0.5356, down 24% from its year-to-date peak of $0.71 in March. Although fewer XRP tokens are available for immediate sale, the expected surge in demand has not materialized. According to Santiment, 2.58 million XRP remains on cryptocurrency exchanges, valued at $1.32 million.
XRP Bollinger Bands Signal Possible Breakout as Price Nears Key Levels
Some analysts believe that XRP may be gearing up for a breakout. The Bollinger Bands on XRP’s monthly chart have tightened to levels last seen in 2017, a period that preceded an explosive rally for the cryptocurrency. Back then, XRP surged by over 75,000%, reaching an all-time high of $3.84 by January 2018.
“XRP Bollinger Bands Tighten, Hinting at Major Price Move. Source: @matthughes13
The compression of the Bollinger Bands suggests a potential price move. However, whether XRP will experience a similar rally this time remains uncertain. The XRP price is currently trading in a range between $0.52 and $0.54, with a key support level at $0.53. If XRP breaks above this range, price targets of $0.56 and $0.60 are possible. Conversely, if the price falls below $0.53, it could drop to $0.46.
XRP Price Climbs to $0.5356 Amid Market Activity. Source: CoinMarketCap Binance Sees Surge in Stablecoin Holdings as Traders Shift from XRP
While Binance XRP reserves have dropped, the platform has seen a sharp rise in USDT and FDUSD holdings. USDT holdings increased by 919 million, reflecting a 4.34% rise, and FDUSD saw a 59.2% increase.
As cash out their cryptocurrency holdings in favor of stablecoins, they appear to be waiting on the sidelines, hoping for clearer market conditions.
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