Binance's XRP holdings fell to about 2.61 billion tokens in early July, hitting the lowest level in five months.

The Crypto Basic, a blockchain media outlet, reported on Tuesday that the decline shows XRP continues to flow out of the world's largest cryptocurrency exchange.

CryptoQuant data showed Binance's XRP holdings fell to about 2.61 billion tokens in early July and have stayed near that level. No large inflows have been confirmed since that would replenish exchange balances. A simple reading of the decline suggests the supply of XRP that could be sold immediately into the market has shrunk.

But the price moved in the opposite direction over the same period. That means the fall in exchange balances did not translate into an immediate rebound. The market appeared to be more influenced by liquidity, trading activity and investor sentiment than by exchange holdings.

Analyst Arab Chain (아랍 체인) pointed out that Binance's XRP holdings hovering around 2.61 billion tokens marked a five-month low. The analyst also saw investors moving tokens off trading platforms, reducing the amount of XRP available for sale. Arab Chain added that without accompanying demand, supply reduction alone would be unlikely to produce a rebound.

In the medium term, a possible easing of selling pressure has been raised. If buying demand emerges while exchange supply is tight, conditions could become more favorable for XRP.

Over the past year, a drop in holdings has not always worked as a bullish signal. Binance held more than 3 billion XRP a year ago, when XRP traded near the cycle peak with prices above $3.25. XRP then fell about 72 percent to as low as $1.04 in early July. Binance's XRP holdings also steadily declined over the same period, broadly tracking the price downturn.

That contrasts with views that treat declining exchange holdings as a sign of investor accumulation or a one-way positive factor. It confirms that prices can fall even when holdings decline if broader market weakness is strong. It is therefore hard to conclude a short-term rebound based on this figure alone.

Order-flow indicators also remain closer to a selling bias. Arab Chain analysed what it described as Binance's cumulative volume delta (CVD) confirmation score and said selling pressure was continuing. The 30-day price-CVD confirmation score stabilised around 0.84, but the analyst saw buying activity as not strong enough to support a sustained reversal.

It also mentioned the possibility that the market could enter a stabilisation phase after a prolonged bearish period. XRP traded around $1.11, up 4.62 percent over 24 hours, and weekly returns also turned positive again. Arab Chain forecast that if CVD turns positive and the confirmation score strengthens further, buying interest could revive and support a broader recovery.