Amid a prolonged bear market, altcoins, including XRP, have shown substantial weakness.
For XRP, however, this period of poor performance has created a buying window for investors, including both retail, whales, and institutions.
XRP on the verge of a supply shock?
Interestingly, with XRP trading below its 2025 peak levels, investors across the market have turned to aggressive accumulation.
As a result, the altcoin’s Supply on Exchanges has dropped significantly over the past two months.
Inasmuch, Exchange Depositing Transactions have declined from 19.4k during the October market crash to stabilizing below 1k.
Source: CryptoQuant
Throughout November, these transactions have remained below 1k, currently sitting around 228.
This implies that the amount of XRP being deposited into exchanges has plummeted. In fact, XRP exchange balances are down 29% since February as billions of XRP move off CEXs into long-term custody.
This decline is even more substantial on shorter timeframes. CryptoQuant data, according to Diana, shows that XRP on all exchanges has fallen from 3.95 billion to 2.6 billion.
Source: CryptoQuant
This decline marks a 34.18% or 1.35 billion drop in the sell-side liquidity over the last two months. Such a massive decline signals increased demand, with investors moving away from exchanges to cold wallets or self-custody.
These market conditions suggest that a real supply squeeze may quietly be underway. But the question is, who’s accumulating?
Whales accumulate the dip
Significantly, this decline is mainly driven by large market players, including whales. As such, Whale to Exchange Flow has dropped from 48.7k in October to 1k at press time.
Source: CryptoQuant
A decline in this metric suggests that whales have sent fewer XRP coins into exchanges. Instead, these market players are holding onto existing coins and are accumulating from elsewhere.
Coupled with that, Exchange inflows have remained minimal through October and November. According to CoinGlass data, XRP has recorded positive Netflow for only 14 days in the past 60 days.
Source: CoinGlass
This indicates that outflows have largely dominated the market, currently at -$8.23 million, down from -$35 million the previous day.
XRP Spot ETF brings along institutional demand
Even more promising, XRP ETFs have joined the charts, bringing institutional investors along. In the past, XRP relied mainly on small-scale traders, but with XRP’s approval weeks ago, the dynamics have shifted.
In fact, since the launch of XRP Spot ETFs, they have recorded Net Inflows. As a result, Total Net Assets have surged from $248 million to $687 million, marking a $439 million jump in two weeks.
Source: SoSoValue
Such a massive inflow indicates increased demand from institutional investors, further shrinking the supply available in public books.
A fruitful December ahead for XRP?
So far in Q4, Ripple XRP has experienced intense downward pressure, dropping from a high of $3.05 to a low of $1.8.
Since bouncing above $2, Ripple’s XRP has traded within a parallel consolidation channel. As such, XRP has remained stuck between $2.0 and $2.2.
Source: TradingView
Despite poor price performance, the altcoin has experienced massive demand during that period. With XRP in a period of accumulation, every indicator points towards a supply shock.
Therefore, if demand holds, XRP will break out of consolidation and reclaim $2.5 resistance. Reclaiming this level in December is key, and could see XRP target $3.1.
However, if the period prolongs, XRP will trade within the $2.0-$2.3 range.
Final Thoughts
- XRP exchanges’ balances dipped 29% from February and by 34.18% over the past two months.
- Demand from whales remains steady, while XRP spot ETFs have recorded net inflows since launch, increasing total assets to $687 million.
Source: https://ambcrypto.com/investors-pull-xrp-into-cold-storage-december-volatility-ahead/
