Exchange Reserves Drop To 7-Year Low
XRP exchange reserves are now down to about 1.7 billion tokens. This is the lowest level that has been recorded in over 7 years. When there is less exchange supply, it usually means that liquidity is getting tighter at active trading venues.
Lower reserves mean that there are fewer tokens available for immediate selling pressure. When the circulating supply on exchanges shrinks, volatility can quickly get worse. This kind of structural tightening could lead to conditions that support nonlinear repricing.
ETF Demand Intersects With Holding Trend
21Shares says that the demand for ETFs is a big part of XRP’s path. In their first month, XRP ETFs based in the US brought in more than $1.3 billion. Even after small drops, total inflows are still close to $1.18 billion.
Long-term inflows point to structural allocation rather than short-term speculation. At the same time, it looks like a lot of retail holders are becoming more committed to long-term positions. This intersection cuts down on the amount of liquid available while keeping capital absorption steady.
Supply Shock Mechanism Gains Attention
The report looks at XRP’s tightening supply and compares it to past supply shocks. Analysts talked about situations like the GameStop episode that were caused by a lack of liquidity. A long-term drop in tradable tokens can make price changes bigger than they should be.
When demand is high and supply is low, prices may rise quickly. The speed of capital can make both upward and downward movements much stronger. If ETF accumulation keeps going, price discovery may get stronger through feedback loops.
Recommended Article: Why XRP Price Is Falling Today As Bears Target $1.25
Bitcoin ETF Precedent Provides a Framework
21Shares looked at Bitcoin’s ETF path as a useful point of reference. Bitcoin went from $40,000 to $100,000 thanks to net inflows of almost $38 billion. That rise in value happened in less than a year after the launch.
At the time of the ETF’s launch, XRP’s market cap was about one-eighth of Bitcoin’s. If a company has a smaller market cap, it means that comparable inflow volumes will have a bigger effect. This situation could make people more sensitive to price changes if demand keeps going up.
Regulatory Clarity Sets the Course for 2026
Regulatory stability is still a key part of XRP’s future. Clear rules could make it more likely that institutions will keep using ETF structures. On the other hand, uncertainty may make it less likely for more capital to be put to use.
21Shares says that regulatory clarity is one of three main factors. Other factors are the continued demand for ETFs and the use of XRPL in the real world. These factors all work together to create valuation scenarios for 2026.
Possible Outcomes for XRP in 2026
The base case scenario sees a peak price of $2.45. If regulatory and adoption progress stays steady, this outcome has a 50% chance of happening. This prediction is supported by steady inflows into ETFs and better utility.
The bull case says there is a 30% chance that the price will reach a high of $2.69. Strong institutional tokenization and a tighter supply could lead to faster price changes. On the other hand, the bear case aims for $1.60 if adoption stays the same.
Current Price Tests Bear Case Limit
Right now, XRP is trading close to the projected bear case level. Bulls are having a hard time keeping prices stable above the $1.60 support level. This threshold is a very important psychological and structural turning point.
Short-term weakness does not cancel out structural drivers that last for a longer time. Exchange reserve contraction and ETF inflows are still important metrics. The direction of future prices will depend on whether capital absorption is greater than liquidity constraints.
