Google Search Can Predict Bitcoin Price
A recent study professionally suggests that cryptocurrency markets move depending on the kind of attention they receive unlike traditional financial markets. Moreover it is also enumerated that Google Search Can bitcoin price prediction.
Similar to other traditional financial assets, cryptocurrencies don’t respond to the same set of market factors as traditional financial instruments. But they actually move more closely with cryptocurrency specific factor according to the non-profit’s report.
These factors comprise investor attention and market momentum, illustrated as the time-series cryptocurrency momentum at the daily & weekly frequencies. Moreover the markets do not view cryptocurrencies similarly to standard asset classes.
The study adeptly used price data series over multi-year time frames, also the study compared actual returns to the projected returns utilizing standard finance pricing model known as the CAPM. They also went on to compare cryptocurrency returns to that of traditional currencies such as the euro, metals like gold and macroeconomic factors respectively as consumption growth.
Eventually these result statistically suggesting a stronger narrative in other proxies, identified as the measure of returns a day or week prior. More essentially, generally the price increase across one, three, five or six days could be easily predicted by a single daily return, while a weekly return could always predict one, two, three or four-week market movement. Importantly this study incorporates data from consumer activity on search forums such as giant like Google and social media sites namely as Twitter.
It is also found that a standard deviation increase in searches for keywords such as bitcoin forecasted a small increase in the token’s price in the following weeks. It is predicted that on average, a single standard deviation increase in the keyword search would actually lead to a 2.75 percent price increase, according to the study report. More so standard deviation increase in Twitter post counts virtually resulted in a 2.5 percent increase in bitcoin’s price.Also Read Start a Venture like Binance