Key Insights:
- XRP whales have been transferring large amounts of the cryptocurrency into Binance, while XRP price consolidates.
- XRP exchange outflows have cooled down significantly in the last 2 weeks.
- Arizona lawmakers are lobbying to have XRP added to the state’s strategic reserve fund.
XRP price just concluded another week of sideways consolidation. Analysts have been keeping tabs on flows to establish a directional bias. Besides, the latest data may be leaning towards capitulation.
XRP price retested short-term (2-week) support near the 1.34 price level, even though it previously bottomed out at $1.11 earlier this year. Analysts have been waiting to see whether the cryptocurrency will drum up enough demand from its current support level.
However, on-chain data revealed that whale outflows have been intensifying, potentially adding downside pressure on XRP price. CryptoQuant analyst Darkfost noted a surge in Binance inflows from whales over the last 7 days.
The analysis also disclosed that most of the sell pressure was from whales holding over 100,000 XRP. Whales ensured that the cryptocurrency retreated by more than 7% from its weekly top to its weekly low.
If the same trend continues, XRP price risks losing its current short-term support. Another capitulation event will likely retest support near $1.11.
Here’s What XRP Reserves Reveal About XRP Price Prospects
XRP exchange reserves previously maintained an overall downtrend despite months of sell pressure. However, that downtrend fizzled out since the second week of February.
Instead, XRP exchange reserves have been trending sideways, with a bit of upside. This reflected the recent surge in Binance inflows. However, that uptick remained limited, even as it contributed to the XRP price downtrend.
The good news for XRP holders was that the subsequent sell pressure did not manifest as a major XRP reserve uptick. This suggested that either exchange inflows remained relatively weak or that most of them were absorbed by traders buying XRP at recently discounted prices.
The observation was important because whales often accumulate, especially after heavy discounts. However, this time, whales are still selling even during a consolidation phase.
This downward pressure may weaken current support levels, potentially triggering another capitulation. In other words, XRP price is currently at risk of more downside, considering that whales have recently extended their sell pressure.
The probability of another selloff was high now that XRP exchange reserves have abandoned the previously observed downward trajectory.
Arizona Picks XRP as a Potential Addition to Its Crypto Reserve
While XRP price outcomes and exchange reserves may have kicked off the week on a gloomy note, there was still some positive XRP news. Lawmakers in Arizona, US, are reportedly eyeing XRP as a reserve asset.
The state is reportedly planning to build a crypto reserve according to a recently introduced bill, dubbed the Arizona Digital Reserve Bill. The latter has reportedly added XRP as one of the assets to be added to the reserve under the bill.
The bill highlights XRP’s growing appeal as a crypto reserve asset. It was also one of the few cryptocurrencies that President Trump shortlisted in his Federal Crypto Reserve basket of assets in 2025.
This highlights growing institutional appeal. It may also mark XRP price as one of the cryptos on track for a long-term recovery. However, XRP price remains at risk of more downside in the short term, judging by recent observations. It will be interesting to see how things will unfold this week as February wraps up.