EconPapers    
Economics at your fingertips  
 

Bitcoin price change and trend prediction through twitter sentiment and data volume

Jacques Vella Critien (), Albert Gatt () and Joshua Ellul ()
Additional contact information
Jacques Vella Critien: University of Malta
Albert Gatt: Utrecht University
Joshua Ellul: University of Malta

Financial Innovation, 2022, vol. 8, issue 1, 1-20

Abstract: Abstract Twitter sentiment has been shown to be useful in predicting whether Bitcoin’s price will increase or decrease. Yet the state-of-the-art is limited to predicting the price direction and not the magnitude of increase/decrease. In this paper, we seek to build on the state-of-the-art to not only predict the direction yet to also predict the magnitude of increase/decrease. We utilise not only sentiment extracted from tweets, but also the volume of tweets. We present results from experiments exploring the relation between sentiment and future price at different temporal granularities, with the goal of discovering the optimal time interval at which the sentiment expressed becomes a reliable indicator of price change. Two different neural network models are explored and evaluated, one based on recurrent nets and one based on convolutional networks. An additional model is presented to predict the magnitude of change, which is framed as a multi-class classification problem. It is shown that this model yields more reliable predictions when used alongside a price trend prediction model. The main research contribution from this paper is that we demonstrate that not only can price direction prediction be made but the magnitude in price change can be predicted with relative accuracy ( 63%).

Keywords: Bitcoin; Sentiment analysis; Prediction methods; Cryptocurrencies (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://link.springer.com/10.1186/s40854-022-00352-7 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:fininn:v:8:y:2022:i:1:d:10.1186_s40854-022-00352-7

Ordering information: This journal article can be ordered from
http://www.springer. ... nomics/journal/40589

DOI: 10.1186/s40854-022-00352-7

Access Statistics for this article

Financial Innovation is currently edited by J. Leon Zhao and Zongyi

More articles in Financial Innovation from Springer, Southwestern University of Finance and Economics
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-20
Handle: RePEc:spr:fininn:v:8:y:2022:i:1:d:10.1186_s40854-022-00352-7