Market analysts warn of a potential supply shock as XRP reserves on exchanges decrease

Source: Yellow Original Title: Market analysts warn of a potential supply shock as XRP reserves on exchanges decrease

Original Link: XRP on centralized exchanges has fallen to 4 billion tokens, representing only 8% of the circulating supply, according to recent market analysis. This decline occurs as investors transfer their holdings to long-term storage despite falling prices.

What happened: reserves on exchanges decrease

More than 30 million XRP tokens left exchanges in a single day over the weekend, according to Ripple Bull Winkle’s analysis published on the X platform.

The withdrawal pattern suggests that investors are prioritizing self-custody over immediate access for trading.

The current 4 billion tokens available on exchanges represent a significant contraction of the tradable inventory. Ripple Bull Winkle noted that most of the supply on exchanges consists of illiquid holdings rather than active sell orders.

“A float this low with increasing institutional demand will probably create explosive conditions,” Ripple Bull Winkle wrote. “Supply shocks are unannounced; they simply trigger.”

Why it matters: institutional positioning

The supply reduction occurs while spot XRP ETFs hold $1.340 billion in assets under management, with 669 million tokens locked.

X Finance Bull reported that these funds recorded zero daily outflows over the past 30 days, making them the only crypto ETFs with that distinction.

Market analysts believe that the decrease in exchange supply is a precursor to reduced selling pressure and greater price sensitivity to demand changes. “Liquidity disappears first,” Ripple Bull Winkle stated. “Most won’t realize until sellers have vanished.”