XRP’s Binance Scarcity Index has climbed to 0.77, its highest reading in more than two years, while the token trades near $1.13. The signal points to shrinking sell-side supply on the largest exchange for the asset.

CryptoQuant data shows Binance XRP reserves have dropped roughly 20% since November 2024. Meanwhile, derivatives markets suggest shorts got squeezed near $1, setting up a test of the $1.20 resistance.

XRP Binance Scarcity Index Rises to Its Highest Level Since Mid-2024

The XRP Binance Scarcity Index reached about 0.77 this week, according to CryptoQuant analyst ArabxChain. The reading is the highest in over two years and follows a long stretch of relative stability.

The index tracks how scarce XRP has become on Binance compared to earlier periods. Rising values suggest fewer coins are available for sale, which typically translates into weaker potential selling pressure.

Historically, the deepest negative readings told the opposite story. In December 2024, the index collapsed as holders flooded Binance with deposits to take profit during the rally toward $3. Today’s setup is the mirror image, with coins leaving the exchange into price weakness.

Exchange reserve data confirms the withdrawal trend. Binance held around 3.27 billion XRP in November 2024. That figure now sits near 2.6 billion, a decline of roughly 650 million coins, or 20%.

Moreover, the drawdown accelerated recently. Reserves slid from about 2.8 billion in May to 2.6 billion in early July, the same window in which the scarcity index broke out.

A sharp dip and rebound of roughly 350 million XRP in February and March likely reflected internal wallet transfers rather than organic flows.

Shorts Paid the Price at the $1 Bottom

Shrinking supply alone does not lift prices, however. Demand remains the missing piece, and derivatives data shows how positioning around it has shifted.

Coinglass data shows XRP’s open interest-weighted funding rate stayed mostly positive through May, even as price fell from above $1.45. Longs kept paying and kept getting punished.

In contrast, June brought a sharp flip. Negative funding clusters deepened as the price approached $1, and the most aggressive negative prints hit between June 26 and 28, right at the lows. Shorts were paying to press a market that had already hit its deepest holder losses in 12 years.

That crowding set the stage for a squeeze. The rebound to $1.13, therefore, reads as short covering rather than confirmed spot demand. Funding has turned mildly positive since early July, suggesting a positioning reset without tipping into euphoria.

XRP Price Prediction Hinges on the $1.20 Resistance Zone

The daily chart frames the battle. XRP fell from above $1.55 in February to the $1.00-$1.04 support zone in late June, the area a previous analysis flagged as the last major floor. That zone drove the current rebound, and XRP is now 8.6% higher over the past 7 days.

The nearest resistance stands at $1.20, the level that capped the mid-June bounce. A daily close above it would open the May breakdown area at $1.35-$1.40, roughly 22% above the current price. The daily RSI near 55 leaves room for such a move before overbought conditions appear.

Still, caution flags remain. Volume has declined throughout the recovery, a sign that spot buyers have not yet embraced the move.

However, demand may be building elsewhere. XRP volume recently topped Bitcoin (BTC) on Upbit, and BeInCrypto’s July prediction noted seasonal strength for the token.

A drop back below $1.00 would invalidate the recovery structure entirely. Thin Binance supply gives bulls leverage above $1.04, yet the same setup collapses quickly if the $1 floor gives way.

Источник: BeInCrypto