XRP Liquidity Crashes to 6-Year Low: How Could This Impact Price?

XRP has remained under pressure after pulling back from $1.54, and new market data now shows a drop in liquidity on major exchanges.

Verified CryptoQuant analyst Arab Chain recently revealed that XRP liquidity on Binance has fallen to its lowest level in more than six years. This raises concerns about how easily the market can handle large trades.

Key Points

• XRP’s 30-day liquidity index on Binance dropped to 0.043, its lowest level since January 2020.
• Arab Chain says weaker liquidity could make XRP more vulnerable to sharp and sudden price movements.
• Santiment reveals that the average active XRP trader currently sits at a 47% loss.
• XRP’s 30-day MVRV fell to its lowest level since December 2020, signaling extreme fear among traders.
• Analyst Casi warned XRP could still fall toward $1.10 or $0.87 before staging a recovery.

XRP Liquidity Crashes to 6-Year Low 

In his analysis, Arab Chain revealed that the 30-day liquidity index for XRP on Binance has continued to decline while XRP trades around $1.34. 

The index has now dropped to roughly 0.043, its weakest level since January 2020. According to the analyst, this shows that market depth has weakened significantly and that there is far less liquidity available for trading than in previous years.

Arab Chain pointed out that XRP saw much stronger liquidity conditions between 2022 and 2024. During this period, the liquidity index moved above 3 and even crossed 4 points at times. These higher readings came during periods of stronger trading activity and heavier market volatility.

However, over the past few months, liquidity has collapsed. Arab Chain said this decline could mean that speculative interest in XRP has weakened and that fresh money is no longer flowing into the market at the same pace. 

He added that low liquidity could make XRP more sensitive to sudden price swings because large buy or sell orders can now move the price more easily.

How This Could Impact the XRP Price

Speaking on the price impact, Arab Chain noted that markets with weak liquidity often become more vulnerable to sudden and aggressive price moves. If trading activity rises quickly when liquidity is low, prices can react sharply because there are not enough orders in the market to absorb the extra demand or selling pressure.

However, despite this possibility, the analyst clarified that low liquidity does not automatically mean XRP will turn bullish or bearish. 

He stressed that the market currently remains cautious, with traders waiting for stronger signals before making major moves. XRP’s market activity has slowed noticeably compared to earlier periods that saw stronger inflows and more active trading.

XRP Has Entered an Undervalued Zone

In a separate report, blockchain analytics platform Santiment revealed that, amid the ongoing downtrend, the average XRP trader who has been active over the last 30 days is now sitting at a loss of around 47%.

This is based on XRP’s 30-day Market Value to Realized Value (MVRV) ratio. Santiment noted that MVRV readings usually move back toward 0% over time, which makes the current level an extreme undervalued zone for XRP. The company also noted that XRP’s 30-day MVRV has now dropped to its lowest level since December 2020.

Santiment said the deeply negative MVRV reading shows that many traders have reached high levels of fear and frustration. In previous market cycles, similar conditions often appeared before strong rebounds.

However, the platform warned that weak MVRV readings alone do not guarantee an immediate reversal, even though they may suggest that most panic selling has already happened.

Could XRP Revisit Lower Levels?

Meanwhile, market analyst Casi warned that XRP still faces strong resistance despite its recent decline. She said XRP has continued to face rejection below a key consolidation pattern over the last few days.

🚨 The Clock Is Ticking for XRP! 🚨

Over the last few days, XRP has continued to reject below the major consolidation pattern. We’ve spent 4 months fighting the $1.65 resistance, and the longer this fails to reclaim it, the more likely it becomes that we need one final flush… pic.twitter.com/oLQ3kFsIAi

— CasiTrades 🔥 (@CasiTrades) May 26, 2026

Casi explained that XRP has spent the past four months struggling to break above the $1.65 resistance level. According to the analyst, the longer XRP fails to reclaim that level, the higher the chances of one final drop toward lower macro support zones.

The analyst identified $1.10 and $0.87 as the key support levels to watch. However, Casi believes XRP could see a massive recovery after testing those lower support areas. The first major sign of a stronger recovery would come if XRP manages to reclaim the $1.65 level and turn it into support.