The supply of Ripple (XRP) saw a substantial drop that could result in supply shock which could in turn cause price reversal.

XRP tokens reserved on exchanges declined to 2.73 Billion and maintained this same low seen in July 2023.

The supply of Ripple (XRP) saw a substantial drop that could result in supply shock which could in turn cause price reversal.

XRP tokens reserved on exchanges declined to 2.73 Billion and maintained this same low seen in July 2023.

The total XRP tokens held by Binance reached 2.73 Billion—a low point that exceeded 3.27 Billion in late 2024 showing 540 Million less tokens.

Exchange reserves typically decreased as investors transferred their tokens into private wallets as this behavior showed interest in long-term storage along with decreased market selling.

The continuous decline in XRP supply could possibly trigger a supply shock which might lead to an upward price reversal for XRP.

> "The reduced exchange reserves may not create enough market strengthening as the majority displayed negative sentiment. The future potential of XRP price could be supported by accumulating scarcity if owners continued buying the digital asset."

The bullish outlook requiring validation would require price to sustain its upward movement above critical barriers of resistance.

XRP’s dropping exchange supply was an indication for price growth but failed to provide conclusive evidence without market confirmation.

Discussing the technical side of XRP, Ben Armstrong, a crypto influencer, explained that a shift in open interest was an essential aspect to consider.

However, XRP saw an essential shifts in open interest. The open interest level dropped by 70% from around $2.5B in late 2024 to $0.8B.

XRP’s leverage also decreased alongside speculative interest diminished thus leading to the market drop. Also, the funding rates turned negative sometimes, indicating bearish sentiment.

Additionally, XRP saw a price peak at the same time social engagement hit its highest point. Social engagement together with hype generated significant changes to the market price before its increase.

The decline of social engagement led to a simultaneous price decrease which established the vital role of social metrics.

Future open interest decreases may lead to less price volatility yet showed indications of price stability.

A strong market reset might happen now as the open interest rates remained low while prices were rising as long as the social industry picked up momentum again.

However, the altcoin faced potential hurdles to maintain bullish price growth as both metrics showed a lack of fresh momentum.