XRP's Vanishing Exchange Supply and the Looming Institutional Bull Case

The XRP market in late 2025 is undergoing a quiet but profound transformation. As exchange-held supplies shrink and institutional demand intensifies, the asset is positioning itself for a potential breakout. This analysis examines the interplay between liquidity tightening and institutional accumulation dynamics, revealing why XRP may be on the cusp of a significant bull case.

Vanishing Exchange Supply: A Liquidity Tightening Signal

Exchange-held XRP has plummeted to historically low levels, signaling a shift in market dynamics. According to CoinGlass data, the total XRP supply on major centralized exchanges now stands at approximately 2.1–2.5 billion tokens, or roughly 2.1–2.5% of the total circulating supply of 99.98 billion. This represents a stark decline from earlier in 2025, when exchange balances were significantly higher. Notably, Coinbase's XRP holdings dropped by 83% between June and September 2025, reducing from 970 million to just 165 million tokens across 10 cold wallets. Such reductions suggest that major custodians are either withdrawing liquidity or preparing for regulatory compliance, both of which reduce short-term selling pressure.

Meanwhile, platforms like Binance, Bitget, and Bybit continue to facilitate daily trading volumes exceeding $1 billion, but their on-chain balances have also contracted. For instance, Binance's XRP holdings fell to 2.7 billion tokens by late November 2025-the lowest in 12 months.

This trend indicates a broader withdrawal of speculative capital from exchanges, a precursor to institutional players stepping in to absorb supply.

Institutional Accumulation: Whales and ETFs Drive the Narrative

The decline in exchange liquidity has coincided with aggressive institutional accumulation. Between September and November 2025, XRP whales added 340 million tokens to their portfolios, pushing total large wallet holdings above 7.8 billion XRP. This buildup occurred as retail traders offloaded positions during a post-July 2025 price correction, when XRP peaked at $3.67. Institutional buyers strategically targeted the $1.90–$2.20 range, a historically strong support zone.

The launch of XRP ETFs, such as XRPI and XRPR, has further amplified institutional demand. By late November 2025, these products had absorbed $954 million in inflows over 18 consecutive trading days. Daily inflows averaged $12–$15 million since mid-November, creating a buffer against volatility by absorbing supply that might otherwise depress prices. This dynamic has helped stabilize XRP above $2.17, even amid broader market uncertainty.

On-chain data corroborates the institutional narrative. Wallets holding 10 million or more XRP expanded their positions by 8% since October 2025, while exchange balances dwindled. This shift from retail speculation to structured accumulation is a classic prelude to major price recoveries, as seen in prior crypto cycles.

Regulatory Clarity and Adoption: The Foundation for Long-Term Confidence

The institutional bull case for XRP is underpinned by two critical factors: regulatory clarity and real-world adoption. The U.S. SEC finalized its settlement with Ripple in August 2025, providing much-needed legal certainty. This resolution has enabled institutional investors to engage with XRP without the overhang of regulatory ambiguity, a key barrier in previous years.

Simultaneously, Ripple's On-Demand Liquidity corridors have gained traction in cross-border settlements, with financial institutions increasingly adopting XRP for remittance use cases. This utility-driven demand reinforces XRP's value proposition beyond speculative trading, attracting long-term capital.

Technical Indicators: A Case for Breakout Potential

From a technical perspective, XRP remains in a defined accumulation zone between $1.90 and $2.10, where consistent buying pressure has been observed. Weekly indicators like the Stochastic RSI and Bollinger Band compression suggest that a breakout is imminent. If XRP surmounts the $2.40–$2.50 resistance range, it could trigger a bullish reversal, targeting key levels near $3.60 and beyond.

Conclusion: A Convergence of Forces

The convergence of vanishing exchange supply, institutional accumulation, regulatory clarity, and technical strength paints a compelling case for XRP. As liquidity tightens and large players consolidate positions, the asset is primed for a potential surge. Investors who recognize this dynamic may find themselves well-positioned to capitalize on the next phase of XRP's journey.