XRP Tests Critical Long-Term Demand Zone as Exchange Reserves Fall to Multi-Month Low

XRP is currently testing a decisive long-term demand zone between $1.80 and $1.90 as market conditions across the altcoin sector show increasing signs of deterioration. After failing to sustain upside momentum, price action has become fragile and the structure is printing lower highs and lower lows, reinforcing the narrative that the broader market may be shifting toward a bearish phase that leaves many altcoins exposed to deeper drawdowns.

Despite the weakening technicals, on-chain data provides a nuanced counterpoint. A recent report from Company CryptoQuant highlighted a sharp decline in XRP balances held on Company Binance, with exchange reserves contracting to around 2.66 billion XRP — the lowest level recorded since July 2024. Historically, such declines in exchange reserves indicate that fewer tokens are available on trading platforms where they can be readily sold, often signaling reduced immediate sell-side pressure rather than large-scale distribution.

This divergence between price behavior and on-chain supply dynamics is especially notable at current levels. While the short-term chart suggests buyers are losing control, declining exchange reserves raise important questions about how much incremental selling pressure remains if price keeps sliding. In previous cycles, similar conditions sometimes preceded stabilization or relief rallies when sentiment became overly pessimistic.

On the weekly timeframe, XRP is extending a prolonged corrective move, trading near $1.87 and well beneath the weekly faster moving average that has now turned into resistance around the $2.40–$2.60 zone. After topping above the $3.40–$3.60 region, price has consistently printed lower highs and lower lows. Weekly candles show sustained selling pressure with limited downside wicks, implying weak dip-buying interest at these levels.

The $1.80–$1.90 range stands out as a structural support area that bulls must defend to avoid a deeper breakdown. A sustained weekly close below $1.80 would materially weaken the broader structure and could expose XRP to moves toward $1.50 or lower. Conversely, if buyers successfully defend the $1.80 area and on-chain supply remains constrained, even modest demand could catalyze a sharp recovery because reduced liquid supply amplifies the price impact of incoming bids.

Volume dynamics add further nuance: selling accelerated during the breakdown from the $2.50 area, but recent weeks have recorded declining volume — a pattern that can indicate exhaustion rather than accumulation. For a meaningful reversal, XRP would need to reclaim and accept above the former support-turned-resistance band near $2.20–$2.40.

Market participants should also note related flows across major platforms. Reports point to collapsing inflows into Bitcoin and Ethereum on Company Coinbase while Company Binance retained relatively higher activity, a distribution of capital that can influence broader altcoin performance.

In short, the next sessions are decisive. The interplay between weakening technical structure and contracting exchange reserves — highlighted by Company CryptoOnchain summaries and on-chain datasets from Company CryptoQuant — will determine whether XRP forms a base around $1.80–$1.90 or extends its decline alongside the wider altcoin market. Traders should monitor on-chain reserve trends, weekly closes, and volume behavior to separate a potential supply-driven rebound from a genuine structural breakdown.

Featured image from Company ChatGPT, chart from Company TradingView.