Ripple supply on exchanges drops but price remains unchanged

Since February, the supply of Ripple’s XRP held on cryptocurrency exchanges has decreased by 28%, reaching a seven-month low. 

This reduction in exchange-held supply generally suggests reduced selling pressure, which could lead to price increases. 

However, despite this trend, XRP's price has not reacted positively, dropping by 24% from its March peak of $0.71. 

Currently, around 2.58 million XRP tokens, valued at approximately $1.32 million, are held on exchanges, according to Santiment data. 

Typically, when the supply of an asset on exchanges falls, it signals that fewer tokens are available for immediate sale, often reducing selling pressure. 

This dynamic can drive prices higher, but for that to happen, a corresponding increase in demand is necessary. 

In the case of XRP, this surge in demand has been absent. 

Since reaching a year-to-date high of $0.71 on March 11, XRP has declined steadily, currently trading at $0.53. 

This price drop has also affected the percentage of XRP’s total supply held in profit. 

On March 11, 91.21% of XRP’s supply was in profit, but by July 4, this percentage had plummeted to a 16-month low of 67.38%. 

Fortunately, there has been some recovery, with the percentage now at 76.79%. 

According to market analysts, XRP's recent price movements show that it has been trading within a horizontal channel since July 17, where the upper line acts as resistance and the lower line serves as support. 

On September 5, XRP's price fell below this channel’s lower support but has since started to recover. 

If XRP can successfully retest this former support level and demand remains strong, the token could resume its uptrend, potentially reaching targets of $0.56 and $0.60. 

However, if the retest fails, XRP's price may drop further to $0.46, invalidating any bullish outlook.

At the time of writing, the XRP (XRP) price was $0.5392.