XRP’s trading conditions on Binance have deteriorated sharply, according to a new analysis by market expert Sam Daodu. Daodu points to a 30-day liquidity index that has fallen to roughly 0.043, the lowest level since January 2020.
For context, between 2022 and 2024 the same index typically sat above 3—and at times above 4—signaling a much deeper and more active market.
XRP Liquidity ThinsThe liquidity drop was reflected in exchange flows. Between May 3 and May 15, around 403 million XRP left Binance, with large wallets withdrawing tokens almost every session.
The pattern resurfaced on May 22: whales removed $49.2 million worth of XRP while the price remained below $1.35. Daodu notes that similar behavior also showed up in late February and twice in March, again around the $1.35 to $1.40 area.
CryptoQuant’s interpretation adds another layer: the drain appears less like long-term investors losing confidence and more like a change in who holds XRP and where that liquidity sits.
CryptoQuant’s ExplanationIn that reading, XRP isn’t necessarily being dumped into the market. Instead, it’s being moved beyond the reach of the retail order book, which is why liquidity on Binance is thinning while the token’s broader narrative can remain intact.
That means even a single medium-sized order—something that might barely register in a deeper environment—can move XRP by roughly 4% to 5% on its own.
‘Neither And Both’ ReadIn that scenario, a wave of positive news or even one large buyer could push XRP higher quickly, because there’s less in the way to slow the move.
So is the liquidity drop a red flag or a bullish setup? Based on the data, Daodu’s framing is that it’s both “neither and both.” A five-year liquidity low isn’t, by itself, a crash signal. But it also isn’t an all-clear.
At the time of writing, the altcoin was trading at the lowest point of its three-month consolidation range, at $1.32. This represented a 5% drop over the course of the month.
Featured image created with OpenArt; chart from TradingView.com
