XRP’s supply on Coinbase has seen a significant decrease of almost 90% in recent months, according to on-chain data. In June, the exchange held close to 970 million XRP across 52 wallets, but by mid-September, that number had dropped to approximately 99 million XRP spread across just six wallets.
An expert has noted that this sharp reduction indicates a classic supply crunch. When coins are taken off exchanges, it typically suggests that large holders are not looking to sell but rather store, stake, or use them elsewhere. With less supply available, each new buy order can have a more significant impact on the price. If demand increases while XRP remains scarce, a price squeeze could be on the horizon.
The liquidity crunch on Coinbase comes at a time when Wall Street is showing growing interest in tokenization. BlackRock, under the leadership of CEO Larry Fink, has been exploring blockchain-based ETFs and tokenized assets. Additionally, the Depository Trust & Clearing Corporation (DTCC) has been linked to potential listings of altcoin-related ETFs.
For XRP, this development is significant as institutional pathways are expanding. The possibility of a U.S. spot XRP ETF, although currently delayed, is a topic of speculation. Approval of such an ETF would provide traditional investors with direct exposure to XRP and could further reduce its supply.
In addition to institutional interest, macro trends are also supportive of XRP. The U.S. stock market has been hitting new highs consistently, and historically, when the Federal Reserve cuts rates near record market levels, equities and risk assets, including crypto, have tended to trade higher. This environment may be driving recent multi-billion-dollar Bitcoin purchases, which often have a positive impact on the broader crypto market, including XRP.
From a technical standpoint, XRP has broken out of a descending wedge pattern and has achieved its first higher high in months. Support is currently around the $3 level, with resistance near $3.35. A strong breakthrough above this level could open the door to price targets of $4 to $5, with $5 representing a significant psychological barrier.
Looking ahead, if bullish sentiment and ETF developments align with the shrinking exchange supply of XRP, the cryptocurrency could potentially aim for $10 in a prolonged rally. However, reaching this level may also prompt heavy profit-taking. Nonetheless, the supply crunch creates the possibility of higher valuations in response to increased demand.