Data analysis is very useful to help predict market movements. The more data the better. Trend analysis and fundamental analysis are a great start but social analysis is quickly becoming a useful tool as well. Most of social trend data is collected from twitter.
A research paper published in December called “Market Sentiment Helps Explain the Price of Bitcoin” examines this trend in more detail. Its author concludes:
"By combining the concept of Metcalfe’s law the variation of the BTC price can be accurately explained by using a market sentiment volume about BTC that is positively scored on social networks. The assumption is that the price of BTC is predominantly a result of the demand-supply balance of buyers and sellers, which is greatly influenced by market sentiment. It is likely that market sentiment is also highly affected by the price itself, forming a circular and bidirectional reflexivity."
This News Bitcoin article outlines this data nicely:
Source 35 min ago | Kai Sedgwick
It’s Better to Be Hated Than Ignored
According to the Watson’s Reports bot, bitcoin has the highest amount of negative hourly sentiment (11.5%). That’s to be expected given bitcoin’s dominance; haters gonna hate after all. A look at the runners-up in the positive and negative categories reveals some interesting entrants. The most positively mentioned coins are sia (20.6%), zclassic (19.5%), and digibyte (18.7%). Ubiq and stellar complete the top five.
In terms of negativity, after bitcoin it’s ethereum (6.1%), litecoin (5.3%), bitcoin cash (4.9%), and tenx (4.6%). Because the bot updates its analysis each hour, these trends are quite dynamic, with many cryptocurrencies, save for bitcoin, regularly trading places. Whether social analysis is an arbiter of market trends is a matter for investors to agonize over.
Images courtesy of Shutterstock, and Watson’s Reports.
When it comes to quantifying social analysis, I wonder how much people are reading the media that bots are scrubbing. For example, if BTC has the largest negative hourly sentiment at 11.5%, is that 11.5% of all social media scrubbed? I understand it would be complicated to figure this out, but isn't it also just important to know how many people are reading this negative sentiment?
Fascinating new way to gauge price though. It's like having tangible FOMO and FUD.
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I agree. It is hard to see exactly how these figures were calculated and also just how much they are seen.
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The news media are still publishing a lot of negative news regarding cryptocurrencies - feeding the negative sentiment in the market. In the end, the price is the only thing that matters - and I'm seeing some of the better know crypto's hitting some support at major levels ... we will wait for some bullish price action and a sign that prices want to go up!
As for now, the markets are still in the red.
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Yes I agree mainstream media is out to paint cryptocurrency in a bad light. The powers that be want to lower the price so that they can make a good entry into the market. This downtrend will not last. It may take prices to extreme lows but those low prices will only be momentary and the bulls will come raging back harder than ever.
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Interesting information. This may also have a use as a contrarian indicator, right? Most of the time people go the opposite way when investing. There is a saying that you should be greedy when there is fear and fear when there is greed...
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I agree! There are multiple ways this information can be put to use. Eventually you could even have bots trading based of social sentiment.
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I have a bit into XLM. Nice to see it on the positive list.
JGV
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Yeah but make sure to keep an eye out as things can change very quickly in this bear market we are currently looking at.
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It has been fairly stable ranging from 4000- 4500 sat at any given time on Binance.
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Glad to hear it. It's never a bad idea to set a stop loss above your entry price just in case though.
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Nice to know. I wouldn’t have thought that Waves is more mentioned them Ether, would be nice to know which one of those both got more positive and negative feedback.
I am a bit shocked that DGB got so much positive mentions. Someone should think it would be much more worth then currently if it is so much liked but on the other side other factors are still going into the price.
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Yes i was surprised to see Waves so high up on the list as well. And DGB shouldn't have showed up on any lists in my opinion. It needs to be left alone and forgotten about.
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Well, I can imagen that Waves is high in ranking but still that it got more then Ether is a suprise for me. But maybe because Waves is performing quite nice since December and also Ethers network is struggeling recently, so this could be some aspects for it. I like both, so it's ok for me :)
But yes, DGB ... this is one of my first buys as I started with crypto and I wanted to forget about it lol Good think that I invested just really little money.
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Yeah I would have guessed Ethereum would be in second place. I also figured Neo Would have a better ranking but I suppose Neo does better in asian countries.
DGB had a good run back in summer 2017 but most of it was because somebody spread a rumor that it was going to be partnered with and incorporated into Minecraft... SMH
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Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://news.bitcoin.com/trend-analysis-reveals-loved-hated-cryptocurrencies/
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