XRP is reportedly showing signs of tightening supply, with exchange balances falling to levels not seen in years. Despite this shift, the cryptocurrency’s price remains stuck below $2, highlighting an unusual disconnect between shrinking availability, slow demand, and weak price performance.
XRP Exchanges Balances Crashes To New Lows
The supply of XRP on crypto exchanges has dropped to an eight-year low, yet the token continues to trade below $2. According to Glassnode data, XRP supply held on exchanges has fallen to 1.6 million tokens. This marks a roughly 57% decline from the 3.76 billion XRP recorded on October 8, 2025, representing the lowest level since 2018.
From a basic economic standpoint, a lower supply combined with rising demand often triggers a price surge in assets. For example, when coins are moved off crypto exchanges into private wallets, they are less available for immediate sale, which can limit supply and potentially support price appreciation. Analysts like X Finance Bull also see declines in exchange balances as a bullish signal that could create a supply shock and potentially spark a rally.
However, despite exchange balances reaching multi-year lows in this cycle, the XRP price has struggled to maintain upward momentum and has continued to hover around $1.8. This choppy action suggests that reduced supply alone has not been sufficient to sustain a recovery or alleviate ongoing selling pressure.
Why The Price Remains Stuck Below $2
Although XRP saw a sharp rally that briefly pushed its price above $3 earlier in 2025, that move was short-lived. Constant distributions, negative investor sentiment, and general market volatility have erased much of the gains, pushing the cryptocurrency almost 50% below its former highs.
XRP continues to struggle to rise above $2 because its repeated breakout attempts have been rejected, keeping it below key resistance levels. This behavior points to weaker demand and lower buyer participation. Persistent selling pressure has also weighed heavily on price. In recent months, accelerated sell-offs have intensified market declines, preventing any meaningful or sustained reversal.
On-chain metrics also provide extra context for the ongoing weakness. Notably, the portion of XRP’s supply currently in profit has also declined. Over half of the circulating supply is now underwater, increasing the risk of panic selling and reinforcing the ongoing downtrend.
Broader market conditions also appear to be amplifying XRP’s price struggles. Major cryptocurrencies, such as Bitcoin, Ethereum, Dogecoin, and Solana, are trending lower, reflecting a broader market slowdown that has also weighed on the price.
The combination of these market factors and declining investor sentiment has significantly affected the XRP price, driving it into a downward spiral. While market analysts remain optimistic about the cryptocurrency’s potential for a strong price recovery, XRP remains in the red, having closed 2025 lower and extending its downtrend into 2026 with no immediate rebound in sight.
Featured image created with Dall.E, chart from Tradingview.com
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