XRP community is one of the most active and passionate crypto-community in the space and according to data from “The Tie”, XRP’s Tweet volume is directly correlated to the Trade volume of XRP.
In addition, XRP has the strongest correlation when compared to the dominant cryptocurrency, Bitcoin or Ethereum.
The Tie tweeted:
“Interesting look at how correlated #XRP tweet and trading volumes are. It appears as if spikes between trading and tweet volume occur in uniso. In some cases it is tweet volume leading spikes in trading, in other cases it is trading leading tweet jumps”
From the above chart, on October 2, 2018, the tweet volume of XRP and the trade volume spiked in unison. The same happened on other occasions such as in the month of December 2018 and also in January 2019. However, in November 2018, the trade volume spike prior to the tweet volume.
Although empirical, this comparison between the tweet volume and trading volume draws a conclusion of how the sentiment of the people in the community affects the trading of a particular asset.
Moreover, the same sentiments can be seen in other cryptocurrencies but with less correlation as compared to XRP. The below chart shows the same for Bitcoin. While Bitcoin does have similarity, the correlation is not as strong as XRP’s.
Ethereum has far less correlation with its trade volume and tweet volume as compared to XRP as seen in the chart below.
XRP, once the second largest cryptocurrency has now fallen down to become the third largest cryptocurrency by market cap as per data obtained from CoinMarketCap.
This comparison attracted a lot of critiques who argued that Twitter volume has nothing to do with the price movement.
A Twitter user, Goatmuscle commented:
“Its almost common practice for investment houses to pump chosen stocks on Trading Social Media. ‘Rampers’ & ‘de-Rampers’ are paid by larger corporate entities to help drive the market in a chosen direction… there are many examples on the web if you look hard enough…”
Tiffany Hayden replied:
“It’s also common practice for crypto enthusiasts to turn to Twitter for info and also to connect with others. Assuming people tweet to pump is wrong… It’s also becoming common practice for service providers to answers questions on social media.”
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