XRP's Binance Scarcity Index has climbed to about 0.77, its highest reading in more than two years, while the token trades near $1.13. Exchange reserves on Binance have fallen roughly 20% since November 2024, and a short squeeze near $1 has set up a test of the $1.20 resistance.
XRP's Binance Scarcity Index reached about 0.77 this week, its highest level in more than two years, according to CryptoQuant analyst ArabxChain. The index tracks how scarce XRP has become on Binance compared with earlier periods, and rising values suggest fewer coins are available for sale — typically weaker potential selling pressure.
Coins are leaving Binance
The deepest negative readings once told the opposite story. In December 2024, the index collapsed as holders flooded Binance with deposits to take profit during the rally toward $3. Today's setup is the mirror image, with coins leaving the exchange into price weakness.
Exchange reserve data confirms the withdrawal. Binance held around 3.27 billion XRP in November 2024, and that figure now sits near 2.6 billion — a decline of roughly 650 million coins, or 20%. The drawdown accelerated recently, with reserves sliding from about 2.8 billion in May to 2.6 billion in early July, the same window in which the scarcity index broke out.
Shorts got squeezed near $1
Shrinking supply alone does not lift prices, however, and derivatives data shows how positioning shifted. Coinglass data shows XRP's open interest-weighted funding rate stayed mostly positive through May, even as the price fell from above $1.45.
June brought a sharp flip. Negative funding clusters deepened as the price approached $1, and the most aggressive negative prints hit between June 26 and 28, right at the lows. That crowding set the stage for a squeeze, and the rebound to $1.13 reads as short covering rather than confirmed spot demand.
The $1.20 test
XRP fell from above $1.55 in February to the $1.00-$1.04 support zone in late June, and that zone drove the current rebound. The token is now 8.6% higher over the past 7 days. The nearest resistance stands at $1.20, and a daily close above it would open the May breakdown area at $1.35-$1.40, roughly 22% above the current price.
Caution flags remain. Volume has declined throughout the recovery, a sign that spot buyers have not yet embraced the move. A drop back below $1.00 would invalidate the recovery structure entirely.
Source: BeInCrypto
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