XRP exchange reserves have risen to 11.8 billion tokens despite a $25.7 million liquidation event that forced leveraged traders out of the market.
The figure shows that the amount of XRP held on exchanges has reached one of its highest levels in the past year, which raises concerns about possible selling pressure as the price struggles to recover.
XRP Witnesses Deleveraging Event
XRP fell 15% between Oct. 4 and 17, dropping from $1.52 to $1.29. The decline coincided with a wave of forced liquidations, particularly among traders who had bet on higher prices.
Specifically, Binance recorded $25.7 million in XRP long liquidations across Oct. 7 and 8, and this marked the largest two-day liquidation cluster in the preceding two weeks.
Funding rates also flipped negative in six of the last 11 sessions. This meant traders holding short positions received payments from those holding long positions. In addition, the decline also reduced the amount of leverage supporting XRP’s market activity.
Meanwhile, Binance’s leverage ratio, which measures how much borrowed capital supports open positions, fell from 0.205 to 0.170. Binance XRP open interest also dropped to $453.0 million at the close of October 17, down 15.8% from $538.1 million on October 4.
XRP Exchange Reserve Reaches a Year Extreme
While traders reduced their derivatives exposure, XRP reserves on exchanges followed a different trend. Notably, total reserves across all platforms reached 11.81 billion XRP on Oct. 17, according to CryptoQuant.
For context, this placed the figure at the 99th percentile of its range over the previous 365 days. In other words, exchange balances have rarely reached this level during the past year, and this could add to selling pressure.
However, Binance’s figures were less bearish. The exchange held 2.67 billion XRP, placing its reserves at only the 30th percentile of their range over the same period. This suggests that Binance has not experienced the same unusual buildup across the wider market.
Instead, other trading platforms appear to account for much of the increase in total reserves. While Binance remains a major venue for XRP derivatives trading, its reserve level remains within its normal range.
Netflows Keep Rising While Whale Activity Falls
XRP continued to flow into Binance at an elevated rate despite the broader market decline. Netflows averaged positive 9.3 million XRP per day over the preceding week, while the Z-score reached +1.13.
Specifically, Binance recorded net inflows of 22 million XRP on Oct. 13 and 29 million XRP on Oct. 14. Both figures came after the worst of the deleveraging had passed, confirming that exchange inflows remained strong even after the initial wave of liquidations eased.
On-chain data, however, shows that large holders became less active during the same period. Whale volume fell 44% week over week, while the number of tokens transferred declined 37%.
One possible explanation of this trend is that some holders transferred XRP to exchanges to use as collateral or hedge their positions during the downturn rather than to sell immediately.
If this is the case, the increase in exchange reserves may create less immediate selling pressure than the headline figure suggests. However, this is yet to be verified.