Data shows that FUD related to XRP may be spreading on social media platforms right now, a sign that could potentially help the price reverse.
XRP’s social dominance has risen while its price has fallen
This is evident from data from the on-chain analytics company Sanitation, discussions around XRP have exploded in the past day. The relevant indicator here is “social volume,” which measures the total number of unique social media text documents that mention a particular cryptocurrency.
The social media text documents here refer to a collection of messages, threads, and other forms of text-based data sourced from major platforms such as Twitter, Reddit, Telegram, and 4chan.
Since the statistic only counts the “unique” number of such documents, it means that individual posts carry the same weight no matter how many times they mention the term (obviously, they’re only counted if they have at least one mention).
This limitation has the advantage that a few posts with a large number of mentions of the item cannot affect social volume alone. Thus, the indicator can give us hints about the amount of discussion a coin receives from the average social media users.
Here is a chart showing the trend in social XRP volume over the past month:
The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter
As shown in the chart above, social XRP volume has registered some highs over the past day. This would suggest that discussions around the cryptocurrency have run high during this period.
The graph also shows data for another indicator, ‘social dominance’. This metric tells us what percentage of the combined social volume of the top 100 cryptocurrencies (by market cap) is contributed by an individual coin.
The chart shows that XRP’s social dominance has also seen a major spike recently. This trend naturally suggests that the relative share of discussions on social media platforms related to this item has increased.
The implication here is that the latest increase in social volume is not due to a general increase in conversations related to the cryptocurrency sector, but rather an increased interest in XRP (had it been otherwise, social dominance would not have are changed). too much, even after the rise in social volume).
Since this strong focus on the asset has come as the price fell, it seems likely that these discussions are happening because the investors are scared.
Historically, markets have tended to move in the opposite direction to what the masses expect, with the likelihood of such a reverse move increasing as investors take a stronger view. So since there may be a large amount of FUD circulating among the XRP traders right now, the price may benefit and experience an uptick.
XRP price
At the time of writing, XRP is trading near USD 0.47, down 2% over the past week.
Looks like the asset has observed a decline recently | Source: XRPUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net
