Bitcoin Price is again making crypto community bite their nails. While the world of investment is equating whether fundamental analysis or technical analysis is better, the cryptos street has just shown that neither of the two seems to be effective completely in its case. So today we finally move to sentimental analysis and see where it leads us.
Bitcoin take one – key hole’s hashtag analysis
Keyholes #Hashtag analysis uses the keyword or hashtags to provide analysis of how it has been performing on Twitter and Instagram in terms of posts, reach, impressions and various other criteria’s giving a complete breakdown of the user sentiment on the platform. It has a sentiment pie chart as well which analyses the impact of the news. The analysis only restricted to a day and hence it most useful for traders who have a very very short term horizon
As on July 29 2018, on a daily analysis bases the sentiment chart for the keyword #BTC shows 18.7% positive posts and 76.9% neutral posts with only 4.4 % negative posts giving a score of 80 (based on positive and negative sentiment only) denoting a fairly neutral to positive sentiment among users who have posted on the social media
Bitcoin takes two – social medium’ keyword analysis
Social Mention is a straightforward search engine for finding mentions of any keyword on various social media platforms. Its search reach is much wider the Key Hole’s hashtag analysis as it captures data from much wider sources than just Twitter and Instagram. It does help user also filter if one plans sort results by date, source or period of coverage.
To keep the analysis, a level playing field, when keyword #BTC was used for on daily analysis basis on July 29, 2018, the sentiment is shown by the Social mention tool was 6:1 in favor of positives and also showed that #BTC was used by users every 1 minutes across platform it tracks. On the sentiment index, it showed a score of 6 for positives, 127 for neutral and 1 for negatives again signifying a fairly neutral to positive sentiment.
Bitcoin take three – crypto fear & greed index
Crypto Fear & Greed Index and greed fear analyze emotions and sentiments from different sources and crunch them into one simple number. This is measured because the crypto market behavior is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out). Also, people often sell their coins in the irrational reaction of seeing red numbers. This Fear and Greed Index helps investors from your own emotional overreactions. There are two simple assumptions:
- Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
- When Investors are getting too greedy, that means the market is due for a correction.
Hence the index is marked on the current sentiment of the Bitcoin market and crunch the numbers into a simple meter from 0 to 100. Zero means “Extreme Fear”, while 100 means “Extreme Greed”
The data sources that are covered under this index are weighted based on their importance. They are Volatility (25 %), Market Momentum/Volume (25%), Social Media (15%), Dominance (10%) and Trends (10%).
As on July 29, 2018, the Fear and Greed Index is at 54 scores showing the view as “neutral”. Compared to last month, when it was at 27, it has significantly risen again creating a “neutral to the positive sentiment”
As one may see all three Sentiment trackers used to give out “neutral to positive sentiment” one can expect markets to react positively as the confidence in cryptos seems to be building up again.
Will the price of BTC rise with the sentiment or will it again fizzle out? Do let us know your views on the same.
Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years now. Previously he co-founded Govt. of India supported startup InThinks and is currently Chief Editor at Coingape and CEO at SquadX, a fintech startup. He has published more than 100 articles on cryptocurrency and blockchain and has assisted a number of ICO’s in their success. He has co-designed blockchain development industrial training and has hosted many interviews in past. Follow him on Twitter at @sharmasunil8114 and reach out to him at sunil (at) coingape.com