Ripple (XRP) Deposits on Exchanges Falls below 3 Billion: $0.70 Price Breakout Ahead?
XRP Price Analysis
XRP price reached a 20-day peak of $0.63 on August 25 but has since retraced 8% in the last 3 days. On-chain data suggests that bull traders are bracing for a significant breakout in another upswing.
XRP Price Dips 8% After $0.65 Rejection
XRP has experienced a consistent uptrend throughout the second half of August 2024, fueled by the favorable conclusion of the Ripple vs. SEC lawsuit. However, when bull traders attempted another upward move over the weekend, a swift profit-taking wave triggered a reversal.
The XRP/USD daily price chart reveals that XRP surged by 49% during the 20 days of trading between August 5 and August 25. However, since XRP failed to surpass the $0.63 resistance level on August 25, it has declined by 8% over the last three days, reaching $0.59 at the time of publication on August 27.
Despite this rapid pullback, critical on-chain data trends suggest that bulls remain resilient.
XRP Exchange Reserves Fall Below 3 Billion Coins
XRP holders have increasingly leaned towards long-term investment strategies since the resolution of the Ripple vs. SEC case in early August. The regulatory clarity seems to have revitalized investor confidence in XRP’s long-term potential.
Exchange reserves refer to the number of XRP coins held on cryptocurrency exchanges, readily available for trading. A reduction in exchange reserves typically signifies that investors are withdrawing their assets to private wallets, often a sign of confidence in future price increases.
As depicted in the CryptoQuant chart, XRP deposits on exchanges stood at 3.12 billion coins at the beginning of August 2024. By August 27, this figure had sharply decreased to 2.97 billion XRP. This implies that investors have withdrawn over 150 million XRP from trading platforms since the start of August.
This trend is significant for two primary reasons. First, this marks the lowest XRP market supply in over 40 days, dating back to July 12, 2024. More importantly, when we value the exchange outflow of 150 million coins at current prices, XRP’s short-term market supply has shrunk by approximately $88 million.
Such a substantial decline in exchange supply positions XRP for a major breakout, particularly if a Fed rate cut in September triggers a surge in demand.
XRP Price Prediction: Rocky Road to $0.70 Breakout
The current technical analysis indicates that XRP may encounter a rocky path before achieving the anticipated $0.70 breakout. The first key resistance level lies at $0.63, which previously triggered the recent reversal. If XRP can break through this resistance, the next target would be $0.65, a psychological barrier where significant selling pressure could emerge.
On the downside, support levels are identified at $0.58 and $0.55. The Bollinger Bands in the daily chart are narrowing, indicating a potential price consolidation. Meanwhile, the Choppiness Index (CHOP) is hovering around 50, suggesting that XRP could remain range-bound before making a decisive move.
However, given the recent reduction in exchange reserves and overall market sentiment, the bullish case for XRP remains strong. If buying momentum picks up, we could see XRP price test the $0.70 mark in the near term.