XRP’s $1 billion escrow release in early 2026 will test crowded long positions, but falling exchange reserves and a 70% long skew in perpetual contracts signal resilience around $1.80-$1.85. Historically, only 20% of unlocks impact the market directly, supporting potential upside.
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XRP exchange reserves declined from 3 billion to 2.6 billion tokens in 2025, with $300 million exiting in Q4 alone.
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XRP/USDT perpetuals show a 70%+ long skew amid week-long consolidation near $1.85.
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Sideways price action for four weeks around $1.80 hints at a supply squeeze despite the unlock.
XRP escrow release looms in 2026: Will it flush longs or confirm support? Falling reserves and bullish derivatives data point to resilience. Explore XRP outlook now.
What impact will the XRP escrow release have on price?
XRP escrow release involves unlocking $1 billion worth of tokens monthly, a routine mechanism since 2017 to manage supply. In 2026, this event tests market positioning as longs dominate derivatives at over 70% skew. Historically, only about 20% of unlocked XRP enters circulation, limiting immediate downward pressure while resilient on-chain metrics like declining exchange reserves bolster support near $1.80.
Zooming out, 2025 has largely been viewed as a bearish year.
But on a closer look, the story changes. Despite the Q4 FUD, H1 2025 delivered solid gains. As is often the case, it only took one trigger in H2 to kick off a profit-taking cycle, dragging top-caps below key support zones.
Ripple [XRP] illustrates this dynamic clearly.
A 36% drop in Q4 alone wiped out all H1 gains, leaving XRP to close 2025 down 12%. Now, heading into 2026, the routine $1 billion escrow release doesn’t exactly help the setup.
Source: TradingView (XRP/USDT)
In this context, keeping a close eye on derivatives is a must.
According to CoinGlass data, the XRP/USDT perpetual contract showed a 70%+ long skew at press time, with bulls clearly positioning for upside. Given XRP’s week-long sideways chop around $1.85, this bias makes sense.
Why have XRP exchange reserves been decreasing?
XRP exchange reserves fell from 3 billion tokens at the start of 2025 to 2.6 billion by year-end, per CryptoQuant data, with $300 million leaving platforms in Q4 alone. This decline reflects growing institutional confidence post-SEC clarity, reducing available supply on exchanges. Lower reserves amid sideways trading around $1.80-$1.85 create a potential supply squeeze, countering escrow unlock pressures. Regulatory tailwinds, including Ripple’s victories and prospective CLARITY Act advancements, drive this on-chain accumulation. Experts note that sustained reserve drops historically precede price recoveries in XRP, as fewer tokens chase bids during consolidations.
Source: CryptoQuant
Bottom line, XRP’s underlying market looks resilient. From a technical standpoint, four weeks of sideways chop around $1.80, paired with falling exchange reserves, suggests a supply squeeze building under the hood, even with the $1 billion escrow release hitting supply. In that context, leaning long makes sense. Despite the 2025 bearish close, first-half gains and regulatory progress underscore XRP’s inflection point, positioning it for potential 2026 strength.
Frequently Asked Questions
What happens when XRP escrow releases $1 billion tokens?
Ripple releases 1 billion XRP from escrow monthly, but typically returns 80% to new escrows, with only 20% potentially entering circulation. This controlled mechanism stabilizes supply, as confirmed by Ripple’s transparency reports. In 2026, it coincides with strong on-chain accumulation, minimizing sell-off risks.
Is XRP set for recovery after 2025’s 12% annual decline?
Yes, XRP shows signs of bottoming with declining exchange reserves, bullish derivatives skew, and consolidation near key supports. Data from CoinGlass and CryptoQuant indicate bulls positioning ahead of escrow events, echoing past cycles where unlocks preceded rallies.
Key Takeaways
- XRP exchange reserves drop signals accumulation: Fell to 2.6 billion in 2025, creating support despite escrow.
- Derivatives bias favors bulls: 70%+ long skew in XRP/USDT perps amid $1.85 chop.
- Supply squeeze likely: Sideways action and reserve decline set stage for 2026 upside breakout.
Conclusion
While 2025 ended down 12% for XRP escrow release concerns loom, falling XRP exchange reserves and dominant long positioning paint a bullish picture for 2026. Regulatory wins and on-chain strength position XRP for resilience, potentially turning the supply unlock into a non-event. Investors should monitor derivatives and reserves closely for confirmation of higher highs ahead.
Source: https://en.coinotag.com/xrps-bullish-positioning-may-weather-1b-escrow-release
