The amount of XRP available for trading on Binance is shrinking rapidly, pushing the liquidity crunch to its most severe level since 2024. The market is seeing forecasts that XRP price volatility could increase if reduced exchange supply coincides with ETF inflows.

On July 6 (local time), blockchain media outlet U.Today reported that in early July Binance's XRP scarcity index rose to 0.77, its highest level since last summer.

A rise in the scarcity index means the amount of XRP immediately available to trade on exchanges is falling. CryptoQuant on-chain data showed large holders increased moves of XRP into non-custodial personal wallets instead of reducing exchange deposits around the mid-year transition period. As a result, Binance's order-book liquidity was assessed to have thinned further even as the XRP spot price held at around $1.14.

Arab on-chain analysts assessed that this scarcity has so far been particularly pronounced on Binance. XRP at one point rose to $1.159 and is trying to settle above a key resistance level, while the freely tradable supply continues to fall, it said.

With past cases in which declining exchange reserves acted as a leading indicator for price gains, the market is seeing forecasts that prices could move sharply on limited supply if ETF inflows continue. In the short term, the $1.17 to $1.20 range is cited as overhead resistance, while $1.10 is mentioned as a key support level.

Shiba Inu (SHIB) also saw a large transfer. A wallet using BitGo custody transferred a total of 114.9 billion SHIB in two transactions via WalletSimple to a new cold wallet. The amount was valued at about $500,000. Because the move did not pass through an exchange hot wallet, it was assessed as more likely tied to long-term storage or preparations for over-the-counter trading than near-term selling.

The bitcoin market is absorbing institutional selling and macroeconomic events at the same time. Pong Lee (퐁 리), CEO of Strategy, delivered the message "Bitcoin is freedom" and underscored bitcoin's long-term value.

However, the company sold a total of 3,588 BTC in two transactions from late June to early July. The sales totalled about $216 million, lifting cash holdings to $2.55 billion. Even so, Strategy still holds 843,775 BTC.

Amid this impact, bitcoin at one point fell below $62,000, viewed as a psychological support level, and technically the $62,600 to $62,850 band turned into a new resistance zone. The relative strength index (RSI) fell to 37.73, signalling short-term weakness.

Miner indicators also added pressure. The miner stress index fell to 0.00, matching levels seen at major bottoms in 2015, 2018, 2020 and 2022. The amount of bitcoin held at a loss was tallied at about 10.5 million BTC. Past analysis also found cases in which such levels coincided with the formation of a long-term bottom.

The market is watching the New York Fed's consumer inflation expectations index and minutes from the Federal Open Market Committee (FOMC) due this week. The market is seeing forecasts that the chance of a short-term rebound in major cryptocurrencies such as bitcoin and XRP could rise if signals of easier monetary policy are confirmed, but it also cannot rule out that bitcoin could again test the $60,000 to $62,000 support zone if a hawkish message emerges.