XRP FUD Spikes, Will This Cause Price Reversal?

The data shows that XRP-related FUD is spreading on social media platforms right now, a sign that could potentially help the price reverse.

XRP’s social dominance has increased while the price is declining

According to data from on-chain analytics firm EmotionRecently, the discussion about XRP has increased. The relevant indicator here is “social volume”, which measures the total volume of unique social media text documents that are mentioning a given cryptocurrency.

Social media text documents here refer to collections of posts, threads, and other forms of text-based data retrieved from major platforms such as Twitter, Reddit, Telegram, and 4chan.

Since the metric only counts the “unique” number of such documents, it means that individual posts have the same importance regardless of how many times they mention the term (obviously, they will only be counted if they contain fewer be at least one mention) ).

The benefit of this restriction is that a few posts with a large number of asset mentions do not automatically reduce social volume. Thus, the indicator can provide us with an indication of 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 past month:

The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter

As shown in the above graph, XRP social volume has registered some high values ​​during the past few days. This shows that the buzz about cryptocurrencies has intensified during this period.

The chart 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 being contributed by an individual coin.

From the graph, it is visible that XRP social dominance has also seen a huge jump recently. Naturally, this trend suggests that the relative share of discussions on social media platforms related to this property has increased.

The implication here is that the latest social volume increase is not due to a general uptick in conversation related to the cryptocurrency sector, but to increased interest in XRP specifically (if it were otherwise, social dominance would not change) even after a lot).

Since so much attention has been paid to the asset because the price has been declining, it appears that these discussions are being fueled by investor fear.

Historically, the market has moved against the expectations of the crowd, with strong investor sentiment increasing the likelihood of such a contrarian move. So since there is potentially a huge amount of FUD circulating among XRP traders at the moment, the price could benefit from it and experience a rebound.

xrp price

At the time of writing, XRP is trading around $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, Chart from Tradingview.com, Sentiment.net