XRP exchange supply hits 8-year low – Rally setup or false hope?

Ripple [XRP] has quietly stabilized below $2 even as exchange balances hit eight-year lows.

With routine escrow unlocks adding minimal net supply, market sentiment is shifting from fear to structural resilience.

The analysis chart shows a decisive shift in XRP exchange behavior. Glassnode data confirms exchange balances have fallen to roughly 1.6 billion tokens, the lowest level since 2018.

That represents a 57% decline from the October 2025 peaks. As a result, immediate sell pressure has materially weakened.

More importantly, the net position change highlights aggressive outflows in late 2025. During this period, price volatility compressed and XRP stabilized below the $2 level.

Source: X

This signals distribution from exchanges into long-term custody rather than panic selling.

In the short term, this structure supports downside resilience. Thin exchange liquidity reduces the intensity of sell-offs but also limits explosive upside without fresh demand.

However, in the long term, the setup mirrors 2018 conditions, when constrained supply preceded sustained rallies.

Moreover, the market is not guaranteed a supply shock. Price expansion still requires spot demand, broader crypto risk appetite, and regulatory clarity.

Data quality debates, hidden exchange wallets, macro liquidity shifts, and Bitcoin’s trend direction remain key variables that could quickly alter this structure.

Routine escrow release plays out

On the 1st of January, Ripple’s escrow unlock arrived precisely as scheduled, releasing 1 billion XRP worth roughly $1.85 billion.

At first glance, the release seemed heavy. In reality, the impact was minimal. Roughly 700 million XRP was quickly re‑locked into escrow, leaving only 300 million tokens as net new supply.

This follows a familiar pattern. Historically, Ripple has re-locked between 60% and 80% of each monthly release.

As a result, these events rarely translate into sustained sell pressure. The market has learned to discount them unless behavior changes.

Briefly, concerns spiked after a memo embedded in the transactions hinted at aggressive sales in 2026. That message was later confirmed as a community prank, not an official Ripple communication. Once clarified, the fears quickly faded.

From a market‑structure perspective, this unlock changes very little. Supply expansion remains controlled. 

In the short term, it removes a potential overhang. In the long term, it reinforces predictability, allowing traders to focus on demand, regulation, and liquidity trends rather than scheduled escrow mechanics.

Is XRP nearing a supply tightening inflection?

XRP’s market reflects routine escrow unlocks, high re-locks, exchange supply at eight-year lows, sustained whale accumulation, and emerging regulatory catalysts such as the CLARITY Act.

These dynamics rarely sustain without momentum shifts. While low exchange reserves support higher valuations over the long term, potential sell-offs introduce short-term downside risks. Thus, volatility expansion seems probable.

Whether driven by RLUSD expansions, On‑Demand Liquidity (ODL) growth, or ETF speculation, the current setup favors sharp upside moves over stagnation. This makes the coming weeks especially pivotal for price direction.

Final Thoughts

• XRP exchange balances are at eight-year lows, escrow unlocks remain tightly controlled, and long-term holders continue to absorb supply.
• With sell pressure structurally reduced, price direction now hinges on demand, regulation, and broader market liquidity heading into 2026.