XRP Rebound Signals Fresh Momentum: Supply Drop Reshapes Market Dynamics

What’s Driving XRP’s Recent Price Action?

XRP is trading at $2.10, demonstrating resilience as the crypto market shifts. The token’s 4.64% 24-hour gain reflects growing bullish sentiment, though this momentum remains fragile against broader market headwinds. Trading volume sits at $93.59M in the last 24 hours, indicating cautious participation as investors evaluate the sustainability of this recovery phase.

The Critical Supply Drop Story

On-chain metrics reveal a compelling narrative. Exchange balances have plummeted to 1.6 billion XRP tokens, representing a dramatic supply drop from the 3.76 billion recorded in October. This marks the lowest level since 2018, according to Glassnode data. The retreat of such magnitude suggests that holders are actively moving assets into self-custody, a pattern historically associated with conviction-driven accumulation rather than distribution phases.

This supply drop carries significant implications: reduced liquidity on exchange order books may amplify price swings in either direction, while the removal of selling pressure creates conditions favorable for sustained recovery attempts.

Institutional Positioning and Whale Activity

Recent data points to coordinated large-holder activity. Record net outflows of 1.4 billion XRP in a single day—the largest on record—align with ETF expansion and institutional demand. XRP ETF products have accumulated $478 million in inflows this month, positioning the token as an institutional-grade asset entering 2026.

This convergence of whale accumulation and ETF-driven demand suggests that key market participants are committing capital to XRP at current levels, reducing the likelihood of panic selling while tightening the available supply for other buyers.

Technical Landscape: Support Holds, But Conviction Wavers

XRP bounced from the 78.6% Fibonacci retracement near $1.87, triggering a MACD bullish crossover that signals weakening bearish pressure. However, the broader technical picture remains cautious. The token trades below critical moving averages—the 30-day SMA at $1.97 and the 200-day SMA at $2.57—keeping medium-term structure questionable.

On-chain support clusters reveal that $1.78 hosts substantial accumulated holdings worth 1.87 billion XRP, serving as the foundation for current price levels. Breaking below this anchor could invite renewed downside testing.

What Happens Next?

The path forward hinges on two scenarios. A sustained advance above $1.90–$2.00 would signal improving structure and could catalyze broader recovery. Conversely, failure to hold $1.87 may invite fresh selling, especially as Bitcoin dominance remains elevated near 59%.

For now, XRP faces a low-to-moderate confidence outlook, dependent on volume expansion and fresh catalyst emergence. The supply drop has created structural advantages, but price conviction remains the missing piece.