Data shows the XRP social dominance has hit a 1-year high recently; here’s what this may mean for the cryptocurrency’s price.
XRP Social Dominance Is Now At Its Highest Level In 50 Weeks
The “social volume” is an indicator that measures the total number of social media text documents that contain keywords related to a given cryptocurrency (which, in the current case, is XRP).
The social media text documents here refer to various social media discussion formats, like tweets, Reddit threads, telegram messages, forum posts, etc.
Something to note about the social volume is that it only counts any text document once, as long as it contains the given keyword at least one time. This means that even if a tweet contains the term twice, its contribution to social volume will still be one unit, not two.
Now, returning to social dominance, this metric finds out what percentage of the combined social volume of the top 100 coins by market cap is contributed by the given cryptocurrency.
Here is a chart that shows the trend in this indicator for XRP over the past year:
Looks like the value of this metric has been quite high in recent days | Source: Santiment on Twitter
As displayed in the above graph, the XRP social dominance has been on an uptrend in the last month as the price of the token has observed a rally. This means that discussions around the asset have recently become hotter among cryptocurrency circles.
This trend makes sense, as price surges are usually exciting to investors and attract many users to the asset, and with such attention comes a lot of talk on social media.
Recently, as the price of XRP has hit its highest level since early November 2022 (that is, pre-FTX crash), the social dominance has also shot up and is now at a value of almost 2%.
This implies that almost 2% of all discussions related to the top 100 cryptocurrencies involve XRP in some form. This value is the highest the metric has registered in the last 50 weeks, nearly a full year.
Such high interest in the asset can fuel the rally and sustain it for longer. However, while that may be true, it also shouldn’t be forgotten that this kind of discussion can also lead to the price forming a top in case euphoria hits the market (something that has generally not ended well historically).
What can be said with a bit more certainty, though, is that the price could see increased volatility shortly due to the increased volume that the coin may see from this mainstream interest.
At the time of writing, XRP is trading around $0.47, up 25% in the last week.
Looks like XRP has gone up recently | Source: XRPUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net