XRP may be preparing for a potential recovery as the amount of tokens held on cryptocurrency exchanges continues to decline. According to one analyst, lower exchange reserves could reduce selling pressure and improve XRP’s short-term outlook.
However, the token still needs to recover several important price levels before analysts can confirm that the broader downtrend has ended.
XRP Reserves on Binance Decline
The latest analysis focuses on Binance’s XRP Exchange Reserve. This metric measures the total amount of XRP stored in wallets connected to the trading platform.
Binance XRP reserves have reportedly fallen from around 2.8 billion tokens to approximately 2.69 billion in recent months.
CryptoQuant analyst PelinayPA explained that declining reserves usually suggest investors are moving tokens away from exchanges. In many cases, holders transfer assets into private wallets when they plan to keep them for a longer period.
In contrast, rising exchange reserves may indicate that investors are preparing to sell.
Therefore, the latest decline could point to weaker selling pressure and stronger interest in holding XRP.
XRP Selling Pressure Appears to Be Easing
One important detail is that Binance reserves have continued to fall even while the XRP price has moved lower.
According to the analyst, this divergence may indicate that institutional or large investors are accumulating XRP while smaller investors continue to sell.
Selling pressure also appears weaker than it was during the middle of 2025.
Meanwhile, both long and short liquidations have declined sharply. This suggests that many highly leveraged positions have already been removed from the market.
As a result, the recent XRP decline may have been driven mainly by spot market selling rather than forced liquidations in the derivatives market.
XRP Momentum Remains Neutral
XRP’s Money Flow Index currently stands near 43.
The Money Flow Index measures buying and selling pressure by combining price and trading volume. A reading near 43 places XRP between overbought and oversold conditions.
This neutral level suggests that neither buyers nor sellers have complete control of the market.
However, the analyst warned that the current data does not confirm that XRP has reached a final bottom.
Many investors appear to be waiting for clearer signals before entering new positions. Therefore, additional waves of selling could still push the XRP price lower.
XRP Must Recover $1.20 and $1.62
The analyst described XRP’s current market structure as a corrective phase within a wider downtrend.
To improve its short-term outlook, XRP must first recover the $1.20 level. A successful move above this price could provide an early sign that buying demand is returning.
Over the medium to long term, XRP would also need to rise above $1.62.
Breaking through this higher resistance level could signal that the corrective phase is ending. However, such a move would require a significant increase in demand and trading volume.
Until XRP recovers these levels, the market may remain vulnerable to further volatility.
Ripple’s Institutional Payments Vision Gains Attention
Positive sentiment around XRP also increased after Ripple CEO Brad Garlinghouse reacted to comments from Flare co-founder Hugo Philion.
During a recent interview, Philion discussed his long-term interest in XRP and praised Ripple’s strategy for institutional payments.
He argued that Ripple’s biggest challenges came from regulatory uncertainty rather than weaknesses in its business model.
The interview attracted further attention after an X user shared a clip claiming that major Wall Street companies were now adopting ideas that Ripple and XRP had promoted for years.
Garlinghouse responded with the word “True.” His brief reaction quickly spread across the XRP community and helped improve sentiment following the token’s recent decline.
Despite this optimism, XRP’s next major move will likely depend on exchange reserves, buying demand and its ability to recover key resistance levels.
