The gains of XRP from the month of January were quickly erased over the past two weeks as the altcoin returned to its late January price at $0.23 today. Right now, the majority of the losses appear to be caused by the massive correction in the altcoin news markets which also caused a sharp downturn for Bitcoin and other tokens. New data now suggests that the Ripple XRP price and volume are linked to Twitter activity.
As you probably know, XRP is one of the most frequently mentioned cryptocurrencies on the social media platforms, especially Twitter.
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As discussed before, there is a relationship between the number of daily tweets that mention Bitcoin and its trading volume. All of this leaves the door open to discuss if the high number of XRP mentions on social media is also influencing the volume of returns.
The Ripple XRP price and volume are apparently linked to the number of tweets mentioning XRP which has been relatively consistent over time with the yearly averages since 2018 being close to 5,937 daily average tweets in 2018, around 5,364 tweets in 2019 and 6,919 tweets on one day in January 2020 which is impressive. On January 6, the cryptonews showed that the daily XRP price gained more than 12% which is why the Twitter activity quickly increased.
Recently, the average number of tweets during February increased to 6,429 daily tweets which was a much higher average than the ones seen in the earlier periods. Hence, the Ripple XRP price and volume are reacting to it. Following the trend of having a higher average in February this year, the correlation between the number of daily tweets and XRP prices in 2020 has been the highest since 2018 at 62%.
However, this relationship has been much lower in the previous years. As we could see, in 2018 the correlation between the number of tweets and the XRP price was set at 35% while in 2019, there was almost no correlation at all (at 7%). In cases like these, a correlation of 0% means that XRP returns and the number of tweets are not related in any way. A correlation of 100%, on the other hand, means that XRP and the number of tweets move completely in the same direction while -100% would mean that they are inversely related.
All in all, the strong relationship between Ripple XRP price and volume mentions in tweets and trading volume is something worth looking out for.
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