XRP Nears Critical Test as On-Chain Data Hints at Bottom

• XRP holds near $1.33 as falling exchange balances hint that selling pressure may be starting to ease.
• Mixed on-chain signals leave XRP at a crossroads, with weak trading activity offsetting bullish metrics.
• ETF inflows stay strong while whale activity fades, signaling a shift in XRP’s market structure.

XRP is showing signs of a possible turning point, according to CryptoQuant analyst PelinayPA, as on-chain data suggests the long downtrend may be stabilizing. The token is trading close to $1.33 while exchange balances keep falling and network activity stays steady. 

PelinayPA said XRP has now entered a consolidation phase after months of sharp price swings. The analyst noted that the token has been moving in a narrow range around $1.33. This suggests the market is no longer driven by strong buying or selling pressure. Instead, price action has settled into a holding pattern as traders wait for a clearer direction.

Exchange Supply Declines as Sellers Step Back

PelinayPA said exchange-related indicators are providing some of the strongest evidence that XRP could be nearing a market bottom. According to the analyst, Binance’s Exchange Supply Ratio has steadily declined throughout May after reaching elevated levels in March and April. 

This move indicates that the assets are being transferred from exchanges into personal wallets where tokens are not available for trading purposes. As per history, the low balance levels in exchange accounts were indicative of fewer sell-offs in the market.

In addition, the analyst also pointed out the fall of 23.73% in the NVT ratio of XRP. The ratio compares the valuation of the network and the transaction volume happening in it. A lower reading indicate that transaction activity is strengthening relative to the asset’s market value.

Another Analyst Sees Warning Signs

Not all indicators point to a recovery. CryptoQuant analyst CryptoOnchain outlined a more cautious view, citing signs that XRP’s market value may be outpacing network activity. According to the analyst, XRP’s NVT ratio rose 20.3% above its three-month average, a signal that the token’s valuation has increased faster than activity on the network.

At the same time, trading activity on Binance weakened sharply. CryptoOnchain reported that XRP exchange inflows and outflows plunged about 98% from their three-month averages, while the number of active deposit addresses fell 94%.

The combination of rising valuation and falling participation suggests investor engagement has cooled even as XRP’s price remains relatively elevated, the analyst said. If demand does not return, CryptoOnchain warned that XRP could drift back toward lower-liquidity price levels.

Related: XLM Breakout Leaves XRP Behind as Correlation Breaks

Whale Activity Weakens While ETF Demand Grows

Additional market data suggests XRP’s investor base may be shifting. Market commentator BankXRP highlighted CryptoQuant data showing XRP’s Binance Whale vs. Retail Spread fell to 88.3%, its lowest level since mid-2024. 

Historically, similar levels have been followed by significant price moves. The metric indicates that large holders are playing a smaller role in Binance trading activity, while retail investors account for a greater share of market participation.

Related: Ripple’s On-Demand Liquidity Service Pushes Cross-Border Payments Toward Real-Time Settlement

At the same time, institutional interest appears to be strengthening. According to SoSoValue data, XRP exchange-traded funds recorded $15.20 million in net inflows during the week that began May 25. Nearly $11.88 million of that total came on May 29 alone.