XRP Liquidity Drop Signals Potential Risks

What to Know:

• Publicly visible XRP Ledger activity has declined significantly, with some metrics down 50-80%.
• A new permissioned DEX feature may have shifted institutional activity off public trackers.
• The data raises questions about the balance between retail and institutional flows in XRP markets.

XRP Ledger (XRPL) metrics are showing a steep decline, sparking debate about the network’s health and the visibility of institutional trading activity. While public data indicates a sharp drop in active users, payment volume, and sender accounts, some analysts suggest that these figures may not fully reflect the current state of the XRPL. The activation of a new permissioned decentralized exchange (DEX) system could be obscuring institutional flows, leading to a discrepancy between public metrics and actual network demand.

XRPL Public Metrics Show Sharp Decline

Recent data indicates a significant decrease in publicly visible XRPL activity. Active users with tags have reportedly fallen from over 200,000 to approximately 38,000, while payment volume has dropped from over 2.5 billion XRP to roughly 80 million XRP. Unique sending accounts have also declined, from over 40,000 to around 3,000. These figures have raised concerns about the overall health and usage of the XRPL.

XLS-81 and the Shift to Permissioned DEXs

The activation of XLS-81, a permissioned DEX system, on February 18 may explain the decline in public metrics. This system allows regulated entities to trade within restricted pools, and transactions routed through these channels are not visible on public trackers. As institutional investors increasingly utilize these permissioned DEXs, their activity may be shifting away from public view, leading to a decrease in the metrics tracked by public dashboards.

XRP Price and Market Dynamics

XRP’s price has experienced volatility, trading near $1.39, with declines of 2% in the last 24 hours, 5% in seven days, and 27% over the past month. Over the past year, XRP has fallen by more than 46% and remains more than 60% below its July 2025 peak of $3.65. In comparison, Bitcoin (BTC) has traded sideways, limiting directional movement across altcoins.

Binance Wallet Activity and Potential Sell Pressure

Recent data indicates significant XRP movements into Binance wallets, with over 31 million XRP transferred in a single day, largely from large holders. These transfers could represent approximately $45 million in potential sell pressure if the funds reach the market. The movement of such large amounts of XRP warrants monitoring, as it could impact short-term price action.

Mixed Signals from Loss Data and Valuation Metrics

Santiment’s analysis reveals that XRP recorded its largest realized loss spike since 2022, following a price decline from approximately $3.60 to near $1.10 earlier this month. Historically, similar spikes have preceded price increases, but it is not certain that this pattern will repeat. MVRV ratios suggest that Ethereum is the most undervalued major crypto at -14.3%, followed by Bitcoin at -6.9%, with XRP at -4.1%.

The decline in publicly visible XRPL activity raises questions about the balance between retail and institutional flows. While public metrics show a decrease, the shift to permissioned DEXs may be obscuring institutional activity. Market participants should consider both public and private data when assessing the overall health and potential of the XRP Ledger.

Related: XRP Inflows Signal Crypto ETF Flows Turn

Source: Original article