XRP social dominance spikes, hinting on potential price recovery

XRP (XRP) has observed an uptick in social dominance amid the prevailing bearish condition plaguing the asset. Crypto analytical resource Santiment suggests that the new XRP trend might indicate increasing chances of a potential price recovery.

Santiment confirmed that XRP started witnessing an uptick in social activity in the early hours of today. Data reveals that this morning the asset observed its most significant spike in social dominance since May. 

🗣️ #XRPNetwork has seen an uptick in discussion in Monday's early hours. Generally, when traders are increasing discussions of an asset while its price has been declining, it increases the probability of a price rise to cancel out #FUD & greedy #shorts. https://t.co/nMgmfe25Tw pic.twitter.com/cc2REyl2pQ

— Santiment (@santimentfeed) July 10, 2023

Notably, XRP’s social volume had continued to suffer since June, particularly due to its price consolidation. Following the drop from the $0.50 psychological support on June 22, XRP has traded within a range of $0.45 and $0.49, unable to reclaim $0.50.

A lack of significant updates on the legal battle between Ripple and the US SEC has also contributed to this decrease in social volume. However, despite the sustained price consolidation, XRP’s social dominance saw a massive spike this morning as discussions on the asset increased.

Santiment emphasized that such an increase in social volume typically serves as a precursor to a price recovery, especially when observed during a market downturn. According to Santiment, this potential recovery usually flushes out greedy short positions and FUD.

The last time XRP saw a similar spike in social dominance was on May 30, when the metric surged to 7.4%. However, the May spike occurred when the asset had set out to recover the losses observed earlier that month.

XRP’s social dominance remained high in early  June. This was due to the buildup to the release of the documents about former SEC Director Bill Hinman’s infamous speech. Ripple released the documents on June 13, leading to a surge in XRP’s value to $0.5658. 

However, this was not sustainable, as social dominance collapsed shortly after, and so did XRP’s price. At a current value of $0.4687, XRP has traded below the $0.50 level for over two weeks. If Santiment’s projections are accurate, the asset could finally stage a recovery.