The cryptocurrency trade market is finally getting out of its initial volatility phase and showing signs of maturity. The bubble-like behavior has been cut down significantly during 2018 crypto winter. However, the crypto trade market is still highly unpredictable, and even the recent price rally has got everyone by surprise. The reason being many analysts have predicted the bulls to take charge during the latter half of the year.
The trade market unpredictability has opened the doors for various sentiment monitoring tools aided by artificial intelligence. It’s quite difficult to keep track of the movement of various exchanges, given there are plenty of them and unlike traditional stock markets where all the stocks of a particular company are listed on a single exchange, major crypto tokens are listed on numerous crypto exchanges.
This scattered nature also makes it quite easy for the whales to manipulate the market. Take the recent price surge for consideration, where it is being estimated that the surge was created by an anonymous whale that pumped the market with a load of Bitcoin which triggered trading bots to execute several simultaneous trades.
What is the Sentiment Analysis?
Sentiment analysis tool keeps track of various documents and statements made by prominent personalities as well as online forums to suggest the sentiment of the market. Sentiment analysis is an automated process that decides if a sentence is positive, negative or neutral. It helps to determine the emotion trends that are expressed online.
The sentiment analysis tool analyzes any given sentence based on specific keywords to give it a score of -1 for negative sentiment, 0 for neutral and +1 to positive sentiment. It is impossible to manually estimate the huge amount of the world’s text data. Thus sentiment analysis system does the job through automation.
The sentiment analysis also comes handy in case of big data sets where To analyze a giant set of data, you need a lot of resources to monitor and rate each data point. This provides the opportunity to better understand historical sentiment trends and to use that analysis to make superior decisions.
How Does Sentiment Analysis Work?
Sentiment Analysis uses a hybrid approach to ensure the preciseness of the data that they provide. The analysis is done through a number of approaches,
• Using vocabulary to look at important keywords (usually verbs and adjectives) along with modifiers like negation words.
• Using rules. Vocabulary is categorized into chunks using rules to group sentences by parameter.
• Applying machine learning techniques. A problem is classified and a dataset is amassed. The features are set up (e.g. keywords).
• The system is trained and evolves to identify key data points and improves over time.
Some of the Leading Firms Involved with Sentiment Analysis
The crypto trade market’s instability and unpredictability have opened the gates for sentiment analysis tools and there are numerous firms involved in providing such services. Some of the prominent names include CryptoMood, Aylien, Concordus, Hi-Tech BPO.
Among all these names CryptoMood is establishing itself as the fastest and most powerful cryptocurrency market analysis tool in the world. It is unique, proprietary, and the only solution of its kind which currently available to cryptocurrency traders and investors.