XRP Scarcity Index Dips Negative but Price Holds Steady

The XRP scarcity index on Binance has dipped into negative territory, averaging around -0.94 in late September, its lowest point since January 2025. This metric, which measures the availability of XRP on the exchange, had reached a two-year high of 0.77 just three months prior.

A negative scarcity index suggests that XRP is more abundant on Binance, which could potentially put downward pressure on its price. However, the current price of XRP has remained stable around $1.50, indicating that demand is absorbing the increased supply. Institutional funds are holding over a billion XRP, which may be contributing to this stability.

The shift in the scarcity index doesn't necessarily mean investors are selling. The data shows that while XRP deposits into Binance surged in September, withdrawals also increased, resulting in only a slight rise in exchange reserves. This suggests heavy trading and repositioning rather than a rush to sell.

Despite the negative scarcity index, the XRP price has held up well. This resilience could be attributed to strong institutional demand, with US-listed XRP funds holding significant amounts of the cryptocurrency. The negative index is a bearish signal, but it's not the only factor influencing XRP's price.