Bitcoin is the largest cryptocurrency in the world by market cap.
It is also the one that started it all with the paper in 2009. For those interested in the paper, you can read it here: https://bitcoin.org/bitcoin.pdf
Quite amazing how far the digital money revolution went and we still do not know who is Satoshi Nakamoto. After all these years.
Bitcoin and cryptocurrency market in general has experienced multiple bear and bull markets since its beginning. With some huge returns and also steep losses.
This huge swings in emotions can be captured when one computes the sentiment of tweets published about Bitcoin and then builds a tracker or indicator of Bitcoin Fear and Greed.
The way one does this is as follows:
– collect hourly all tweets published that contain either the word Bitcoin and / or the cash hashtag $BTC
– compute sentiment for each tweet using machine learning model. One does not necessarily need a complex neural net model like LSTM, but a logistic regression or support vector machines is enough for classifying the sentiment polarity
– from this one computes the average sentiment in each hour
– this can be converted to a scale 0-100. This is necessary because the sentiment values are usually between -1 (negative) and 1 (positive).
This then results in a Bitcoin Fear and Greed Index indicator.
Here are example charts from provider of Fear and Greed indices at https://cryptofeargreedindex.com: