Thomson Reuters is set to launch a bitcoin sentiment analysis tool meant to help investors have a better idea on how future price movements of bitcoin will look like.
The Canadian media company confirmed that it will release a new version of its MarketPsych Indices, which will track and analyze online discussions involving bitcoin. MarketPsych Data LLC, a behavioral economics research firm, will run in conjunction with the data feed, to scan over 400 websites in order to detect market-moving sentiment and trends.
The recent increase in cryptocurrency prices has generated growing number of online discussions about bitcoin and other virtual coins. Many traders have reported using information that they found in forum conversations and news websites to predict the price fluctuations in bitcoin.
Investors have revealed that searching the internet is the best tool you have for determining how others feel about the popular cryptocurrency. Recently, the digital currency has been experiencing sharp changes in sentiment even with no notable news flowing, causing surprisingly huge shifts in the coin’s price.
Global head of quant and feeds at Thomson Reuters, Austin Burkett, said the company was pressed to create a service designed for tracking online sentiment by its customers. Customers report that many informative websites and speciality forums are not that easy to find.
“News and social media are driving the investment and risk management process more than ever with the continuing rise of passive and quant-driven trading,” said Burkett.
Last year, bitcoin experienced a rise of over 1,300 percent almost reaching the $20,000 mark in December. Since then, the coin has lost more than half of its price.
Many analysts have associated these dramatic shifts in price to search engine patterns. When the virtual currency nearly reached $20,000 last December, it was the most searched topic on Google’s search browser. Starting from mid-February, bitcoin searches have reportedly decreased a great deal.
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