The recent XRP sell-off is a fascinating phenomenon that has sparked much debate in the crypto community. While some analysts point to whale dumping as the primary driver, CryptoQuant contributor Pelin Ay offers a different perspective. According to Ay, the data suggests that the current downturn is more about leverage flushes and market weakness than a coordinated exit by large holders.
Ay's analysis focuses on Binance inflows, particularly the behavior of whale-scale wallets. The key insight is that the largest transfers of XRP to Binance have not intensified during the recent drawdown. This is evident from the chart tracking XRP Ledger exchange inflows to Binance by value band. The dataset reveals that the majority of XRP inflows to Binance come from whale and institutional-scale addresses, with consistently high levels of these inflows between 2021-2025.
However, the post-2025 peak shows a decline in the largest Binance inflow bands, indicating that large holders have not been sending tokens to the exchange at the same intensity as before. This shift is significant because rising inflows to exchanges are often interpreted as potential sell-side supply. In other words, assets moved to trading venues can be sold, used as collateral, or repositioned.
Ay argues that the current structure does not resemble prior periods of aggressive distribution. She notes that there were usually sudden high spikes in the 100K-1M XRP and 1M+ XRP groups before major drops. But currently, there is no such extraordinary inflow surge, reducing the likelihood of aggressive whale selling and mass profit-taking.
This distinction is central to Ay's thesis. If XRP were undergoing a classic whale-led sell-off, we would expect to see a sharp increase in large deposits to Binance, especially from the 100,000-to-1-million XRP and 1-million-plus XRP bands. However, the opposite is visible: inflows have cooled while price has weakened.
Ay concludes that the decline is largely due to leverage liquidations and overall market weakness. She emphasizes that in normal hard bear markets, much higher XRP inflows to exchanges are typically seen. This implies that the current sell-off lacks one of the more damaging on-chain signatures often associated with deeper capitulation: whales sending unusually large amounts of XRP to exchanges.
The implication is that the source of selling pressure is important. A liquidation-driven move can accelerate quickly when leveraged positions are forced out, but it does not necessarily imply that long-term holders are actively distributing into the market. Ay also links the post-peak reduction in inflows to weakening spot supply pressure, suggesting that Binance inflows continue to remain low, selling supply will decrease, and demand will increase, making it easier for XRP to move back to the $1.8-2.0 region.
However, the condition matters. A renewed spike in the 1-million-plus XRP band would weaken the analysis, as it would suggest that large wallets are once again moving meaningful supply toward the exchange. At press time, XRP traded at $1.1444, and the market remains volatile, with further analysis needed to fully understand the implications of this intriguing sell-off.
