Twitter could serve as a tool to be able to trade with Bitcoin. This would make the social network, an indicator based on the emotions and feelings of the users. How you can predict the price of Bitcoin? Within the investment, when it comes to making a prediction of price of an asset including Bitcoin, there are plenty of options. Most of the indicators are based on historical data that the same price has registered over time. However, lately it has taken strength in the network, including Twitter, the notion of capturing the emotion and feeling of the market, in place of the usual numerical. The basis of this idea, is that most of the traders are moved by emotions; they go from optimism to frustration. With that in mind, the best way of measuring the emotion collective is a social network. The users of social networks have surpassed the 2,000 million in the year 2015. It is worth mentioning that this strategy is known as analysis of feelings. This analysis has been used to formulate useful ideas in various industries, especially in online marketing and analysis, shares, commodities, etc, In this way, the analysis of the feeling of the social networks, like Twitter, has become a new way to generate possible trading signals for a range of assets, including Bitcoin.
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How could you operate Twitter in order to predict the price of Bitcoin?
If you are a bitcoiner, you have probably heard more than once, those stories of people who bought Bitcoin for pennies and now worth thousands or millions. When that has occurred; call the attention of the media, causing a momentum on Twitter with a feeling “optimistic” of the people towards the criptomoneda; leading to a subsequent price rise. In this way, the public perception has a big impact on the price of Bitcoin; and this perception is registered on platforms such as Twitter. Every second, the immensity of data continues to grow and with this supports the reliability of the analysis of feelings; making it as a tool to predict the returns of investment in cryptocurrencies.
How does the analysis of feelings?
The data from the sentiments embodied in the social networks, like Twitter, can provide a subtle look for investors in the market of bitcoins. The data platform cryptographic multi-faceted “The TIE” has developed an indicator of this type, NVTweet Ratio. According to The SIT, NVTweet Ratio (value of network to tweet), is defined by the following equation: Market Capitalization/ 1M / Volume of Twitter Bitcoin average of 30 days. In summary, a greater volume of tweets related to Bitcoin, we expect a correspondence to its short-term price. Likewise, this indicator can provide very valuable information, when institutional investors are in the game. So he pointed out The TIE, via Twitter: As the volumes of tweets are not increasing as fast as the market capitalization, a ratio NVTweet increasing may reflect a greater institutional investment in cryptography. 2017 was driven by the retail trade (more than 75K tweets per day), while this implementation is significantly lower: we have not seen more than 40K tweets per day in 2018.
As tweet volumes are not rising as fast as market cap, an increasing NVTweet ratio may reflect increasing institutional investment in crypto. 2017 was retail driven (over 75K daily tweets), whereas this run is significantly less – we haven’t seen more than 40K daily tweets in 2018 pic.twitter.com/20jfAf5bTf— The TIE (@TheTIEIO) September 3, 2019
What this means is that the market capitalization of Bitcoin has grown faster than the number of tweets on the social network. What, according to The SIT, it is because the institutions do not talk about your investments, crypto on Twitter, as most of the traders do.
The importance of this indicator
Measure and make a sentiment analysis of platforms such as Twitter, is gaining weight for many companies involved in the trading. To sample The SIT has partnered this week with the trading platform, eToro. Both launched a new financial instrument called TheTIE-LongOnly CopyPortfolio. This instrument, with a system of artificial intelligence that tracks the massive appeal and seeks multiple points of reference to compare to it. The instrument calibrates a portfolio crypto optimum, which is based on the feelings of the publications on Twitter. The following two tabs change content below. Engineer, lover of economics and technology; Convinced that Blockchain will empower them to future generations, giving them freedom and sovereignty to each individual.
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