Analysts are sounding the alarm over the growing liquidity crisis surrounding XRP, with recent data showing that supply on major exchanges like Binance is becoming dangerously thin. According to a new report by Coin Edition (October 27, 2025), a single $10 million XRP purchase could push the cryptocurrency’s price up to $15, given the shrinking exchange and OTC liquidity.
XRP Liquidity on Binance at Critical Levels
Software engineer Vincent Van Code highlighted that Binance currently holds only around 4 million XRP on its visible order book — a concerningly low figure for one of the largest crypto exchanges. If a large investor were to buy 10 million XRP, the order could quickly wipe out available liquidity and trigger a rapid price surge.
While the projection remains theoretical, experts believe that such a scenario underscores the fragile state of XRP’s market depth. Similar liquidity declines have also been noticed on Coinbase, suggesting a broader trend of constrained XRP availability across centralized platforms.
Shrinking OTC Supply Could Signal a Supply Shock
Traditionally, institutional investors use over-the-counter (OTC) markets to buy or sell XRP in large quantities without influencing prices on exchanges. However, these private liquidity pools are reportedly drying up as well. Many long-term holders are refusing to sell, further tightening the supply.
Van Code noted that even though automated trading bots can help stabilize small trades, they are incapable of handling sudden, large-scale demand. This situation could create the conditions for a massive supply shock, potentially leading to a sharp and sustained rally in XRP’s value.
A “Canary in the Coal Mine” Moment for XRP
Community members have described this liquidity issue as a “canary in the coal mine,” hinting at possible major market movements ahead. If whales or institutional buyers can no longer acquire multi-million XRP positions quietly, analysts predict that the next significant purchase could spark a parabolic price rise.
Institutional Dependence on OTC Channels
Van Code addressed criticism that OTC trading favors big investors, explaining that such deals are essential for minimizing volatility. Without OTC channels, large transactions could cause severe slippage—where prices drop sharply during massive sell orders or rise uncontrollably during huge buys.
By using OTC desks, both buyers and sellers can negotiate prices close to market value, ensuring smoother operations without shocking the open market.
What This Means for XRP Investors
The developing liquidity squeeze presents both risks and opportunities. On one hand, it could trigger extreme volatility if institutional demand spikes. On the other, it signals strong holding sentiment among XRP investors, reflecting confidence in the token’s long-term prospects.
As XRP continues to trade around $2.60, analysts warn that the market’s thin order books mean even modest trading volumes could cause dramatic price swings. If a whale decides to accumulate, the move might redefine XRP’s price trajectory entirely.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Cryptocurrency investments carry significant risk.
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