500M XRP exits Binance as sell pressure offsets supply squeeze

Five hundred million XRP have exited Binance since November 2025, cutting average reserves to 2.6 billion tokens, the lowest since February 2024.

CryptoQuant analyst Darkfost said the steady outflow, which continued through a 63 percent price drawdown from XRP's $3.66 peak, leaves little doubt that at least some investors are accumulating the token.

The decline coincided with the launch of spot XRP ETFs in November and December 2025, which required issuers to purchase XRP on the open market and move it into custody. Binance's own internal wallet transfers may account for part of the movement, though monthly average data makes this a minor factor. XRP trades at $1.34, down 0.29 percent in the past 24 hours, after posting a nearly 30 percent gain over the latest month.

The supply-demand divergence — tightening exchange supply against persistent sell pressure — will determine XRP's next directional move. If reserves continue falling while ETF inflows hold, the supply squeeze could eventually push prices higher. But if the outflows represent OTC distribution rather than cold-storage accumulation, the bearish pressure may persist.

Darkfost observed that Binance's XRP reserves have historically tended to rise during rebounds and decline again during subsequent retracements. The monthly-average nature of the metric creates a lag between price movements and changes in exchange balances, meaning the current low could reflect positioning decisions made weeks ago.

The scale of the outflow — 500 million tokens worth roughly $670 million at current prices — suggests more than routine exchange housekeeping. Three explanations dominate: investors moving XRP into private wallets for long-term storage, ETF issuers pulling supply into custody to back their products, and Binance shifting reserves internally to match customer activity.

The timing supports the ETF thesis. Binance's XRP reserves began falling around November 2025, the same month the first spot XRP ETFs launched. The correlation between ETF launch timing and the onset of sustained outflows points to custody demand as a structural driver rather than a temporary shift.

Yet XRP's price has not responded to the tightening supply. The token trades at $1.34, down 63 percent from its $3.66 peak. Bitcoin's broader market weakness and macro headwinds have kept selling pressure on XRP despite the shrinking pool of exchange-available tokens.

The key question for traders is whether the outflows represent genuine cold-storage accumulation or distribution through OTC desks. If the former, the supply squeeze should eventually translate into higher prices as demand absorbs the reduced float. If the latter, the tokens may be quietly changing hands to institutional buyers who will sell into strength.

Prediction markets show moderately increased odds of XRP reaching a new all-time high by year-end, according to Vera data. Continued reserve declines, sustained ETF inflows, and a broader crypto market recovery would all need to align for that scenario to play out.

This article is for informational purposes only and does not constitute investment advice.