XRP On-Chain Data Signals Supply Shock on Binance, Is a Big Rally Ahead?

XRP is showing signs of supply shock on major crypto exchanges amid recent demand from whales and institutional investors. On-chain data confirms XRP scarcity index on Binance is hitting multi-year highs, even as its price consolidates in a relatively narrow range around $1.32-$1.45.

XRP Scarcity Index on Binance Hits 2-Year Highs

The XRP Scarcity Index on Binance metric shows a rise in recent days, according to a CryptoQuant analyst. It has increased to around 0.75, reflecting a notable decline in XRP supply on the crypto exchange.

This means an XRP supply shock is likely due to an increase in withdrawals or a slowdown in deposits. The scarcity index has reached its highest level since July 2024, hitting a 2-year high. Historically, such high levels are associated with investor accumulation, reducing available liquidity for immediate selling.

Meanwhile, XRP is trading near $1.40, with the balance between rising scarcity and price stability suggesting an accumulation phase. If the crypto market continues to absorb supply without sharp fluctuations, XRP would see a potential rally.

As CoinGape reported earlier, Ripple-backed Evernorth Holdings revealed billions in XRP withdrawn from exchanges as whale flows turned positive again. Moreover, large holders have added almost 11 million XRP per day on average since early April, creating a supply shortage.

Will Price Picks Up Upside Momentum?

XRP price fell 1.5% to $1.39 today amid broader crypto market selloffs. The intraday low and high were $1.39 and $1.42, respectively. Furthermore, trading volume has increased by more than 11% over the last 24 hours, indicating a rise in interest among traders.

XRP lawyer Bill Morgan also signaled a supply shock might move XRP price to the upside. The comments came as Strategy’s executive chairman Michael Saylor said, “Bitcoin is setting up for a massive supply shock.” This has sparked optimism among the XRP Army about a potential rally amid institutions’ growing XRP ETF exposure.

The derivatives market showed buying in the last few hours, as per CoinGlass data. At the time of writing, the total XRP futures open interest jumped 0.5% to $2.51 in an hour. The 24-hour XRP futures OI was down more than 3%. Notably, XRP futures OI on CME and Binance fell by more than 12% and 2%, respectively.

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