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What Does Social Sentiment Mean For Crypto Trading?

Due to the speculative nature of cryptocurrencies, social sentiment plays an important role in influencing cryptocurrency prices.

The social sentiment is a way of measuring the emotions behind social media and other online mentions.

For example, when Tesla announced it was purchasing US$1.5 billion of bitcoins, the market displayed a bullish reaction to the news, as judged by the nature of coverage on different media platforms. Consequently, bitcoin prices soared to an all-time high.

While the news of Tesla’s purchase had a significant effect on the crypto market, that is the exception rather than the norm.

Thousands of news articles on cryptocurrencies are published daily. However, only 10 percent of them will be able to generate a Tesla-scale impact on the markets.

Therefore, how do we sieve through this “noise” and focus on the news that moves the needle?

Enter sentiment analysis bots. These bots utilize artificial intelligence and machine learning to run algorithms that parse through media platforms and capture the sentiments of the market.

Sentiment analysis bots focus on certain keywords and phrases, allowing them to gauge the reaction towards events that could affect the prices of different cryptocurrencies.

Upon identifying the general sentiment of an event, these bots will generate price movement forecasts that traders can act on to stay ahead of the curve.

As for the reasons why social sentiment is becoming increasingly popular for predicting stock market movement, they could be summarized as below:

Firstly, it is time-consuming for an individual to scour through different news outlets and analyze individual articles and reactions to determine the sentiment towards it.

Due to the volatile and speculative nature of cryptocurrencies, speed is of the essence when trading on sentiments. Therefore, having a bot that monitors media platforms in real-time and generates price forecasts would be useful.

Secondly, with the rise of fake news, it is increasingly difficult to decipher the facts from fiction. As a trader, you would not want to be caught trading on a fictional piece of news that was published with the intent to generate price movements that would benefit the author.

Hence, by monitoring and checking across different media platforms, sentiment bots would be able to fact-check articles, ensuring you trade on concrete information.

As we have noticed through the volatile reactions of cryptocurrency to different pieces of news, traders need to be more aware of social sentiment today.

Social media platforms like Reddit and Twitter will continue growing, in both users and information shared on them.

In the future, it will be increasingly difficult to decipher through the crowded media industry and act on the news that truly matters.

However, with SnapBot’s market sentiment bots, you can make use of cutting-edge artificial intelligence to monitor potential price signals that could arise and act on them.

By keeping an active pulse on market sentiments and staying ahead of the curve, you can enter trends before others discover them and generate greater returns.

Open a wallet today on SnapBots: snapbots.io

About SNAPBOTS

SnapBots(www.snapbots.io) is an artificial intelligence (AI) research firm based in BVI with global users. Driven by its focus on fields of machine learning and deep learning, it aims to supply trading bots as a service.

About SNAP

SNAP is short for SnapBots Token based on Ethereum and that is used in SnapBots blockchain-based AI bots’ economy.

For more information, please visit:

SnapBots- https://snapbots.io

Join our community- t.me/SnapB

SnapBots Review here : https://www.trustpilot.com/review/snapbots.io

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SnapBots are deep learning bots powered by learning algorithms. For any facet & dimension, they optimize conditions, generate solutions, and get better at that. Big data is crunched at breakneck speed as relevant algorithms are applied to train up capabilities. — SnapBots.io

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