![]() This result is shown also by a little significant relationship that exists between positive tweets and Google Trends data. The cross-correlation value increase up to a value of 0.64, that is quite substantial. The cross-correlation result between Google Trends data and Bitcoin’s price also looks significant. ![]() All patent peaks in the positive tweets plot precede a significant change in the Bitcoin’s price after some days. We can confirm that positive mood could predict the Bitcoin’s price almost 3-4 days in advance. It is proven by a maximum cross correlation value of -0.35 with a positive delay of almost 4 days. Figure 3 shows this result and it’s well rendered that positive tweets can predict the fluctuations of the Bitcoin’s price. We also analyzed tweets with positive mood and we noticed a two-fold increase in cross-correlation value. The same circumstance is visible in the following days: January 23, February 3, February 25 and so on. A patent peak of tweets on 11 February, is followed by a growth of Bitcoin’s price. Nevertheless, if we observe Figure 2, we can notice how, also at a glance, there are peaks in tweets trend that precede peaks in price, sug- gesting a relationship between the two time series. We calculated the cross-correlation and, analyzing the results, we found that, in minimal degree, tweets volume is related to price with a maximum cross correlation value of 0.15 at a lag of 1 day (this is not very significant). Figure 2 illustrates the curve trend of Bitcoin prices, expressed in dollars, and Twitter volume. Inspired by these works, we tried to demonstrate how chatter of tweets might predict the price’s variations of Bitcoin. showed how goods and stocks markets may be influenced by a big exchanged of tweet’s volume. ![]() Some papers show studies using regression methodology or causality analysis. The examined literature shows different ways to highlight the existent relationship between big volumes of exchanged tweets and meaningful variations in the Bitcoin’s price. Furthermore, the comparison between tweets with a positive mood and trend of Bitcoin’s price seems to prove this behavior. Our result seems to confirm that volumes of exchanged tweets may predict the fluctuations of Bitcoin’s price. The computation of cross-correlation yielded interesting results. We analyzed the Bitcoin price’s behavior comparing its variations with the number of tweets, with the number of tweets with positive mood, and with Google Trends results. demonstrated that tweets can predict the market trend 3-4 days in advance, with a good chance of success. Most of articles reports analysis about the existent relationship between the volume of tweets and the market evolution. order to decide the correct strategy of analysis for studying the relationship among Bitcoin’s price and others meaningful parameters, the available related literature has been examined in depth. The cryptocurrency then pushed higher, approaching $68,000 in late 2021, hitting a fresh, all-time high more than 200% above the prior record it set in December 2017.Ĭurrently, bitcoin is down close to 70% from that all-time high, but if it enters another period of continued gains, it could once again benefit from some very compelling upside, rising to price levels it has never seen before.ĭisclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol. The digital asset has gone through several cycles where it rose to fresh, all-time highs and then suffered substantial losses.įor example, bitcoin approached $20,000 in late 2017, but then lost the vast majority of its value within a year. While search interest in the term “Bitcoin” may not be very high right now compared to some points in history, it is worth keeping in mind that the digital currency is still trading close to $20,000, which is substantially more than the cryptocurrency’s value at many points in the past. Later in 2021, the price of bitcoin reached an all-time high of close to $68,000 on TradingView. When examined over the last two years, the measure of search interest reached 97 between January 3 and 9 and then 100 between May 16 and 22. Google TrendsĪnother example of how strong interest in the term “Bitcoin” can correspond with compelling increases in the digital currency’s value is the first half of 2021. Google Trends data for "Bitcoin" dating back to 2004.
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