XRP Supply Thinning on Binance as Scarcity Index Flips Positive

Data from the on-chain analytics platform CryptoQuant suggests that the available supply of XRP on Binance may be tightening.

Some community analysts argue the development could accelerate price movements if demand increases. As of today, XRP is seeing bullish momentum, with the price touching $1.48 for the first time since February. This comes as XRP’s price surged 5% over the last 24 hours.

Key Points

• XRP supply on Binance may be tightening as the Scarcity Index flips positive to +0.48, signaling shrinking exchange liquidity.

• XRP touched $1.48 for the first time since February, rising 5% in 24 hours amid growing bullish momentum.

• CryptoQuant data shows Binance XRP withdrawals surged to 12,500–20,000 between Feb. 21 and Mar. 7.

• Analysts say thin supply and stacked short liquidations above $1.47 could amplify price spikes if demand rises.

XRP Supply Thinning on Binance

In a tweet, XRP community commentator Xaif highlighted a shift in the Binance XRP Scarcity Index. He noted that the metric has flipped to +0.48, a level indicating that exchange balances are now below their historical average.

According to the analysis, more XRP is moving out from the Binance exchange into private wallets rather than remaining available for immediate trading.

The scarcity index measures the relative amount of XRP sitting on exchanges compared with long-term norms. When the value moves into positive territory, it generally indicates tightening exchange liquidity.

In simple economic terms, lower liquid supply can amplify price reactions if a sudden wave of buyers enters the market.

Exchange Liquidity Shrinks

The chart accompanying the commentary shows XRP’s price trend alongside the scarcity index over multiple years. While XRP’s price has experienced several major cycles, the recent shift in the index suggests a fresh phase in which exchange-held supply may be contracting.

If demand increases while liquidity remains thin, market moves can become sharper because fewer tokens are available to absorb buying pressure.

Last week, The CryptoBasic reported that more XRP tokens were leaving exchanges while demand through ETFs continues to grow. Data from CryptoQuant shows XRP withdrawal transactions from Binance surged between Feb. 21 and Mar. 7, reaching about 12,500 to 20,000 withdrawals.

This suggests investors may be moving their tokens into long-term storage instead of keeping them on trading platforms. When coins leave exchanges, the available supply for trading decreases.

At the same time, XRP ETFs are seeing strong demand. James Seyffart said the funds have attracted about $1.4 billion in total inflows since launching in November 2025.

Among known investors, Goldman Sachs holds the largest position, with about $153.8 million in XRP ETF exposure. Other firms involved include Millennium Management, Citadel Advisors, Jane Street, and DRW Trading Group.

Meanwhile, activity on the XRP Ledger is rising, with daily transactions reaching about 2.7 million. The value of tokenized assets on the network has also grown to around $461 million.

Liquidation Levels Stack Above Current Price

Xaif also pointed to derivatives data suggesting that short liquidations could be stacked from roughly $1.47 up to $6. In leveraged markets, short positions are forced to close when prices rise beyond certain thresholds. When these liquidation clusters align with tightening exchange supply, the combination creates conditions for rapid price spikes if the market moves upward.

Notably, the analyst refrained from making a direct price prediction based on the observed metric. However, the observation highlights a potential setup in which shrinking exchange liquidity and large liquidation levels could interact during periods of strong demand.