XRP Balance on Binance Hits One-Year Low: What Are the Causes and Impacts?

Core Insights - The launch of U.S. XRP ETFs in November significantly increased market demand for XRP, helping it resist selling pressure from negative market sentiment [1] - On-chain data indicates a notable decline in XRP reserves on Binance, reaching a 12-month low of 2.71 billion XRP, following the ETF launch [2] - Four XRP ETFs recorded positive net inflows for nine consecutive days, with total assets exceeding $670 million [3] Market Dynamics - Analysts expect buying pressure to strengthen, particularly with the anticipated listing of the 21Shares XRP ETF [4] - The decrease in XRP reserves on Binance suggests a transfer of XRP to long-term holders, indicating a shift in market dynamics [4][5] - The combination of fewer tokens available on trading platforms and increasing institutional demand may create a favorable environment for XRP [5] ETF Impact Analysis - ETF purchases from open markets do not always lead to immediate price increases, as they must absorb the volume of XRP released from Ripple's escrow [6] - ETF managers are restricted from purchasing XRP directly from Ripple due to court injunctions, necessitating purchases from the open market [7] - Maintaining a price level above $2 is critical, as it could indicate a foundation for further upward movement [7]