A study published by the Southern Methodist University indicates that Google and Twitter search volumes seem to anticipate the price growth of Bitcoin and Ethereum.
The paper underlines the importance of the sentiment in the market and the way it can influence the investors’ actions of buying or selling a digital asset, in our case Bitcoin and/ or Ethereum.
To reach their conclusions, the scientists used the Twitter and Google search volumes that seem to showcase how their numbers and the feelings they convey actually anticipate the price evolution.
The basis of this sentiment study resides in the fact that people are directly influenced by their feelings in taking decisions and these feelings actually represent the public psychology. So, if one analyzes the views of individuals on social media, there is a great possibility of actually foreseeing the Bitcoin and Ethereum price growth and vice versa.
However, for us to have the entire picture, we have to say that the study notices the existence of multiple sources of blockchain and crypto news that push information and data about the cryptomarket into the social media networks affecting the overall perspective.
In addition to this, the paper discovered that on social media the overall sentiment is actually positive and preserved its level even when the cryptocurrency market encountered a negative evolution back in 2018.
The study revolves around Bitcoin and Ethereum, the two main projects that actually make up about 70% of the market cap and represent the crypto brands that are quite likely to exist some more years from now.
How is this important for everyday traders and investors?
Since most individuals in the world are now connected to social media, it is very important for us to know what people think about Bitcoin and especially why they prefer to invest in cryptocurrencies.
At the same time, Bitcoin has been created for the Internet and since there are more people in the world connected to social media and using mobile devices than people using banking services, we definitely need to understand the market sentiment without forgetting to take into account that good blockchain projects need to be based on solid grounds and actually bring real benefits to our lives.