XRP has regained the $1.40 level as the broader cryptocurrency market begins to show renewed bullish behavior after a period of volatility and consolidation. The recent move higher suggests buyers are gradually regaining momentum, with investors closely monitoring whether the asset can maintain strength above this key psychological level.

While price action indicates improving sentiment, modern supply chain data suggests that underlying supply dynamics may also be changing. According to a recent CryptoQuant analysis by Arab Chain, metrics tracking XRP liquidity on Binance indicate noticeable changes in the balance between supply and demand.

The report highlights data from the XRP Binance Scarcity Index, an indicator designed to measure the relative availability of XRP on the exchange compared to historical levels. This indicator helps analysts determine whether the market is experiencing ample supply or tightening liquidity conditions that could amplify price movements.

According to the latest reading, the XRP price is currently near $1.41, while the scarcity index is around 0.48. A positive value indicates that the amount of XRP available for trading on Binance is below the historical average, signaling a moderate level of supply shortage on the platform.

Such conditions may augment the market’s sensitivity to modern demand because reduced sell-side liquidity may cause buying pressure to trigger stronger price responses.

The XRP scarcity index suggests sustainable market conditions

CryptoQuant report also analyzes the historical performance of the XRP Binance Scarcity Index to better understand how supply dynamics influence price movements. According to the analysis, periods when the scarcity index records positive values ​​are usually associated with a reduction in the amount of XRP available for sale on exchanges.

This decline in exchange supply often occurs when investors withdraw their tokens to private wallets or long-term storage, or when the flow of deposits to exchanges decreases. In such environments, the market becomes more sensitive to incoming demand. With fewer coins immediately available for trading, even minor buying pressure can trigger stronger price reactions as liquidity on the sell side becomes more circumscribed.

However, the data also shows that the index has fluctuated significantly over time. In recent years, this indicator has fallen to deeply negative levels in several cases. These phases typically reflect a piercing augment in currency inflows, increasing the supply of XRP available for sale and signaling that investors may be preparing to liquidate positions.

Currently, the scarcity rate suggests a relatively balanced market structure. While supply remains somewhat tight on the stock market, it has not reached the extreme levels of scarcity seen during previous bullish phases. This means that selling pressure on Binance remains moderate, although the market has not yet entered a phase of sedate liquidity tightening.

XRP is trying to recover from a long-term downtrend

The daily chart shows that XRP is trying to stabilize after a prolonged correction phase that began after it rejected near the $3.30-$3.50 area in mid-2025. Since this peak, price action has formed a clear sequence of lower highs and lower lows, confirming the continued bearish structure on the higher time frame.

Selling pressure intensified in early 2026 when XRP experienced a piercing collapse that pushed the asset towards the $1.20-$1.30 region. This move was accompanied by a significant augment in trading volume, suggesting that the decline was due to mass liquidations and high market share.

After the capitulation phase, XRP began to form a base around the $1.30-1.40 zone, which now appears to be functioning as a short-term support area. The asset has been gradually rising in recent sessions, with the price returning to the $1.45-$1.47 range as buyers try to regain control of the short-term trend.

However, the broader structure remains cautious. XRP continues to trade below key moving averages, which continue to decline and represent a energetic resistance level.

From a technical perspective, the next essential test lies near the USD 1.55-1.65 zone, where the previous consolidation took place. A sustained break above this region could signal improving momentum, while a rejection could lead to further sideways consolidation as the market absorbs the recent volatility.

Featured image from ChatGPT, chart from TradingView.com