On-chain data compiled by Santiment, an analytics platform, shows that more people are discussing XRP, the native token of the XRP Ledger (XRPL), per statistics captured on July 10. In their assessment, the spike in social chatter, translating to higher social dominance, will most likely draw demand for the crypto asset that has recently been under selling pressure but firm.
The rise in XRP’s social dominance is the highest since May, suggesting that market sentiment could change. Despite this increment, XRP prices are relatively muted, stable on the last trading day, but unable to break above $0.50, a psychological reaction level.
XRP Social Dominance Rising, Will Prices Rally?
Over the past few weeks, Santiment data shows that XRP’s social volume drawn from social media activity has been relatively low. This could be due to several factors, the main one being the lack of significant updates on the legal dispute between Ripple and the U.S. Securities and Exchange Commission (SEC).
Beyond the lawsuit pitting the blockchain company and the regulator who has been, in recent days, cracking the whip on crypto firms, crypto prices have been soft, and XRP has been no exception. To illustrate, although the coin is firm, bulls failed to push prices above the $0.58 level.
Presently, XRP is down roughly 20% from H1 2023 highs. Primary support is at around $0.45, marking June 2023 lows.
Comparing the current surge in social dominance to previous instances in May, Santiment draws attention to the correlation between increased social activity and XRP price expansions. When XRP’s social dominance peaked at 7.4% in May, prices, the analytics platform observed, rose in lock-step.
Meanwhile, when XRP’s social dominance decreased in May, its price also fell. Therefore, while the social dominance of XRP is firm in early July, it remains to be seen whether bulls will flow back and pump prices higher toward the $0.60 liquidation line.
According to Santiment, rising XRP social dominance in the current environment when prices are weak could signal that bulls may offer support in upcoming sessions. In turn, this may inject optimism and momentum considering the recent fear, uncertainty, and doubt (FUD) in crypto primarily due to the SEC’s lawsuits against two of the world’s most popular cryptocurrency exchanges, Binance and Coinbase, in June.
The SEC alleges that among other coins, ADA, the native currency of Cardano, and ALGO, the token priming the Algorand ecosystem, are unregistered securities. At the same time, in December 2020, the regulator filed a lawsuit claiming that Ripple, the blockchain company, raised billions using XRP.
Feature image from Canva, chart from TradingView