Ripple’s native cryptocurrency XRP is facing a major supply crunch, thereby raising analysts’ expectations for a major rally ahead. Latest reports suggest that the XRP supply on the Coinbase crypto exchange tanked 90% over the last three months. This comes as the Ripple treasury demand is on the rise, with analysts predicting an XRP rally to $5 soon.
On-chain data from XRPWallets shows a dramatic reduction in Coinbase’s visible XRP cold storage holdings. The cryptocurrency exchange’s XRP reserves dropped from approximately 970 million tokens held across 52 wallets in early June 2025 to just 99 million XRP distributed across 6 wallets by mid-September 2025. This shows a substantial 89.79% decline in cold wallet holdings over the three months.
This sharp drop in Coinbase’s XRP reserves has raised questions about the underlying factors behind this change. Moreover, the consolidation from 52 wallets to just 6 wallets suggests a major restructuring of how the exchange manages its XRP holdings.
Despite having a massive 100 billion supply, market analysts believe that the XRP supply shock is coming, amid massive Treasury demand, ETF developments, etc. Eight companies have now established XRP-based treasury strategies, signaling growing institutional confidence in the altcoin. The top holders of the treasury are Trident Digital Tech Holdings’, VivoPower International, Wedbush International, with each holding over $100 million of the Ripple cryptocurrency.
On the other hand, a total of 11 spot XRP ETF applications await SEC approval from major asset managers, including Bitwise, Grayscale, Fidelity, VanEck, Franklin Templeton, and ARK Invest. The Rex-Osprey XRP ETF goes live this week under the ’40 Act structure, which could further raise institutional demand. This would further raise institutional demand, driving the XRP supply lower.
Beyond corporate treasuries and ETFs, XRP faces growing utility demand across cross-border payments, tokenized real-world assets (RWA) settlement, stablecoin bridging, interbank settlement, and decentralized finance applications.
Amid the broader crypto market volatility, the XRP price has regained the $3.0 support, with daily trading volume surging 12.47% to $5.7 billion. Additionally, the XRP open interest remains strong at $8.57 billion, as per the Coinglass data.
Citing his Elliot Wave analysis, popular crypto analyst Dark Defender stated that XRP has begun breaking through its initial weekly resistance, signaling the potential for higher price targets. According to his analysis, the next key upside levels are $4.39 and $5.85, based on Fibonacci projections. On the downside, support levels are positioned at $3.01 and $2.85.
Bhushan Akolkar
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.
He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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