Data Shows Bitcoin (BTC) Falls Whenever “Moon” Gets Most Mentions on Twitter.
CryptoQuant believes that trading based on social media sentiment alone is bad.
Many cryptocurrency investors have adopted different tactics to help them decide the perfect buying signal for their favorite coins and tokens. While many rely on well-analyzed Technical Analysis (TA) and Fundamental Analysis (FA) to guide their trading decisions, others have relied on traders’ opinions on Twitter.
Those who trade crypto based on other people’s sentiments on Twitter usually consider certain mentions as buy or sell signals.
Trading Based on Sentiment Is Bad
According to a recent report by CryptoQuant, a cryptocurrency analytics platform, trading based on sentiment from other traders on Twitter is not a good idea, as things usually end badly.
Crypto Twitter Bullish = Local top? Let's find out.
"Let's start with "moon". The results will shock you, as it's probably not what you expect."
by @eth_whalehunterRead More ?https://t.co/sQM0TVhrsz
— CryptoQuant.com (@cryptoquant_com) October 7, 2022
A CryptoQuant analyst noted that he has been keeping track of Twitter mentions for specific cryptocurrency-related keywords, like the moon, buy, and sell, since the beginning of the year.
The analyst also stated that he usually checks the price of Bitcoin, the world’s largest cryptocurrency, whenever those crypto keywords have the most mentions on Twitter.
Per the report, on days when the keyword moon (a situation when the market experiences a significant upward movement) had the most mentions on Twitter, the price of Bitcoin slumped massively.
BTC Dips When Moon Gets the Most Twitter Mentions
On January 19, 2022, ‘moon’ had the most mentions on the microblogging platform. However, Bitcoin’s price went opposite to the keyword, as the top asset class dipped a whopping 22.8%.
In a similar development, moon stole the show and became the most-mentioned word on Twitter on July 6, 2022. Bitcoin’s price surged 8.9% in the early hours of the day and slumped 15.38% before the day ended.
The analyst added that on August 10, 2022, ‘moon’ topped the list of the most mentioned words on Twitter and the result was no different from other days when the keyword had the most mentions. The report added that Bitcoin lost 19% of its value the following day.
On September 10, 2022, ‘moon’ also had the most mention on Twitter, and the world’s largest cryptocurrency soared 4% before plummeting 15% later in the day.
It could be a coincidence that Bitcoin usually has a blood bath whenever ‘moon’ mentions the most. However, people mustn’t rely entirely on social media sentiments to buy or sell digital currencies.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
