Crypto trading & crypto Twitter: the influence of social media on crypto markets

Trading
September 27, 2019

The crypto industry has grown exponentially since Bitcoin was created in 2009. While at first Bitcoin was more of a niche interest, today there’s a massive industry comprised of crypto exchanges, financial services platforms, media publications, conferences, mobile apps, hardware tools, and a flourishing crypto trading market.

Crypto trading bears a lot of similarity to forex trading as the underlying principles, tools, indicators and strategies used in forex also apply to crypto trading. We cover these topics extensively with weekly deep dives in the crypto trading section of our blog.

There is one key difference in terms of accessibility, however. Trading on the traditional forex markets requires a brokerage account to interact with the next level of middlemen who have access to an exchange, whereas crypto trading is open to anyone because you can go to any exchange website to create an account and start trading immediately.  

But one thing that is perhaps even more of a differentiator is the role of social media; in particular, Crypto Twitter, and its influence on the market.

Crypto Twitter

Twitter has many hidden worlds, and one of them is Crypto Twitter - an entire world dedicated to everything related to crypto. In the last few years, we’ve seen a wave of independent crypto analysts joining the social media brigade, sharing their thoughts and views on what’s happening in crypto markets. Some of the more popular crypto analysts on Crypto Twitter include:

  • VentureCoinist (211K followers)
  • CryptoCred (140K followers)
  • CryptoDonAlt (120K followers)
  • Mark Mervini (112K)
  • Nicola Duke (94K followers)
  • Dan Zanger (92K followers)
  • FilbFilb (25K followers)
  • CryptoTrooper (21K followers)

These crypto analysts deal in unique and insightful commentaries on the market, sharing both fundamental and technical analyses

Of course, there are many more crypto analysts out there, on other channels besides Twitter too. Finding the right crypto trading mentor amongst all of these analysts is key to learning techniques and finding your own crypto trading style. 

There are many amateurs out there that are very good at marketing themselves and saying what trading beginners think they should hear rather than real actionable market analysis.

Is there a direct relationship between social media and crypto markets?

As the social media communities continued to grow, crypto traders developed a new approach which entails looking at Twitter and Google trends to identify signals that could predict price movements.

In 2018, a Texas University looked into this relationship with a study published as “Cryptocurrency Price Prediction Using Tweet Volumes and Sentiment Analysis”. The report found that there is a clear correlation between BTC and ETH related activity on Twitter and Google and the price movements in those markets. 

In other words, they found a clear link between the price of Bitcoin and the number of tweets associated with the coin ahead of significant market movements. That relationship held during times of both increasing as well as decreasing BTC prices, further suggesting that the relationship is robust.

Learning more tricks of the trade

Aside from Twitter, there are countless other ways to learn for free on the internet if you are willing to invest time and do your homework. 

Many analysts post their analyses on TradingView and there are a lot of crypto trading blogs dedicated to teaching tricks of the trade. If you’re more into watching videos rather than reading articles, there are many YouTube clips that dive into crypto trading and even full-blown courses on trading on decentralised exchanges for example.

All the information you need to lift your crypto trading game is out there and readily available. You just need to know where to look.

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