Data shows that XRP-related FUD may be spreading on social media platforms right now, a sign that could help the price reverse.
XRP’s social dominance has skyrocketed while the price has been declining
According to data from the on-chain analysis firm holyday, discussions about XRP have increased during the last day. The relevant indicator here is “social volume”, which measures the total number of unique text documents from social networks that mention a given cryptocurrency.
Social media text documents here refer to a collection of text-based posts, threads, and other forms of data coming from major platforms like Twitter, Reddit, Telegram, and 4chan.
Since the metric only counts the “unique” number of such documents, it means that individual posts have the same weight regardless of how many times they mention the term (obviously, they will only be counted if they have at least one mention). ).
This restriction has the advantage that a few posts with a large number of mentions of the asset cannot skew the social volume on their own. Therefore, the indicator can provide us with clues as to the degree of discussion a coin is receiving from average social media users.
Now here is a chart showing the trend in XRP social volume over the last month:
The metric value seems to have been quite high in the last few days | Fountain: Santimento on Twitter
As shown in the chart above, the social volume of XRP has registered some high values over the last day or so. This would suggest that cryptocurrency discussions have risen in this period.
The chart also shows data for another metric, “social domain.” This metric tells us what percentage of the combined social volume of the top 100 cryptocurrencies (by market capitalization) each individual coin contributes.
From the chart, it is visible that XRP’s social dominance has also seen a huge increase recently. Naturally, this trend would suggest that the relative proportion of discussions on social media platforms related to this asset has increased.
The implication here is that the latest rise in social volume is not due to a general improvement in cryptocurrency-related conversations, but rather increased interest in XRP specifically (if it were otherwise, social dominance would not have changed). ). too much even after the increase in social volume).
Given that this heightened focus on the asset came as the price has been falling, it seems likely that these discussions are due to investors feeling fearful.
Historically, markets have tended to move the opposite of what the crowd expects, with such a reverse move likely to rise as investors take a stronger view. So, since a lot of FUD is potentially circulating among XRP traders right now, the price can benefit from this and experience a bounce.
As of this writing, XRP is trading around $0.47, down 2% over the past week.
It seems that the asset has seen a decline recently | Source: XRPUSD on TradingView
Featured image from iStock.com, Charts from TradingView.com, Santiment.net
This post XRP FUD spikes, will this trigger a price reversal?
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