XRP Reserves Are Exploding On Exchanges… Should We Be Worried?

While bitcoin is reaching a new high above $111,000, XRP is evolving in a climate of uncertainty. Supported by the accumulation of tokens by large holders, Ripple’s crypto benefits from a bullish momentum. However, this dynamic is accompanied by tensions: the rapid rise in reserves on Binance and other exchanges fuels doubts. In an ultra-reactive market where every indicator counts, this unstable configuration calls for a fine reading of the dynamics at play.

The appetite of large holders fuels the bullish momentum

A speculative wave is currently sweeping over XRP, fueled by an explosion of futures contracts and renewed interest in derivative markets. The behavior of large XRP holders also draws analysts’ attention, reinforcing the hypothesis of a medium-term bullish anticipation.

Indeed, on-chain data provided by Santiment reveals a significant movement of XRP accumulation by whales. More specifically, wallets holding between 10 and 100 million tokens now control 12.1% of the total supply, compared to 11.88% on May 12th and 11.58% on April 12th.

This progression, although gradual, reflects a targeted accumulation strategy by a segment of investors with substantial resources. An increase in risk appetite among whales implies confidence in the future of XRP, as investors bet on a potential price increase.

This appetite of large holders fits into a favorable macroeconomic environment, stimulated by the general rebound of the crypto market. The price of XRP bounced on a technical support at $2.29 to stabilize around $2.44. Several technical indicators support this dynamic:

• The RSI remains above the midpoint line of 50, with a slight upward tilt;
• XRP is trading above key moving averages (50, 100, and 200 days), respectively at $2.30, $2.26, and $2.06;
• The market as a whole benefits from a sentiment of “increased risk-taking”, driven by bitcoin’s performance that reaches nearly $112,000.

These elements reinforce the idea that institutional actors and experienced investors still consider XRP a strategic asset, at least in the short and medium term.

The rise in reserves on Binance triggers doubts

Alongside this optimistic accumulation, another indicator draws attention: the significant rise in XRP reserves on Binance. According to CryptoQuant data, the volume of tokens available on the platform has increased from 2.7 billion to 2.9 billion XRP since May 1st.

This rapid rise is often interpreted as a sign of token returns intended to be sold. When reserves on exchanges like Binance increase, it can indicate potential selling pressure or increased volatility, especially if traders use these funds to open long or short positions.

Indeed, this rise in reserves occurs as interest in XRP-related derivatives strengthens. The open interest of futures contracts has risen to $4.94 billion, while futures trading volumes have reached $4.63 billion.

This activity suggests renewed engagement but also implies increased exposure to sharp moves, especially if a significant part of the tokens enters active circulation. While the technical rise may continue towards $3.00, the potential pressure related to mass selling or rapid profit-taking could reverse the dynamic.

The most intriguing signal remains the appearance of a golden cross on the XRP/BTC pair, a rare phenomenon last observed in 2017. At that time, this crossover of moving averages on the weekly chart preceded a spectacular XRP rally. This technical setup, proposed in an analysis of XRP recovery prospects, triggers a renewed hope among investors. It opens the door to strong rebound scenarios, while contrasting with concerns related to massive movements observed on crypto exchange platforms.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.