How traders can use Twitter to anticipate altcoin price moves
When cryptocurrency traders strike it rich, they frequently resort to Twitter to share their excitement. They have a habit of doing the same thing when it comes to telling sad experiences of being destroyed, discussing exciting new assets, or offering insight and predictions on which initiatives will be the next great thing. These surges of social attention may sometimes produce positive feedback loops, in which the tokens that command the conversation see their prices rise exactly because of it.
The number of tweets mentioning a certain item might reveal a lot of information. Loopring’s LRC, NuCypher’s NU, Enjin Coin (ENJ), ANKR, and The Sandbox’s (SAND) all showed significant month-to-month spikes in daily tweet volume this month. This is hardly surprising, given assets that see large rallies tend to grab the attention of the Twitter population.
What’s amazing is that the record-breaking tweet volume peaks were logged not in response to monthly price highs, but ahead of them on all five occasions. In other words, rather than following price movement, the voluminous Twitter conversations around these currencies predicted it. How might traders detect the early signals of this unusual social activity?
Heads-up from the crowd
There are few ways to properly catch each rise in tweets regarding a given commodity if you don’t follow almost everyone on Crypto Twitter.
Furthermore, tweet volume is one of several indicators used to generate the VORTECSTM Score, an algorithmic indicator that analyses previous market and social activity patterns with years’ worth of historical data performance to determine how bullish a coin’s prognosis is.
A check at raw Twitter data would suffice in the case of the month’s top Twitter darlings, as all of these coins appeared on the Unusual Twitter Volume panel when their tweet volume peaked.
LRC/USD: A 744.44% increase in tweet volume followed by a +350.79% monthly price change
The fact that the layer-two protocol continues to offer cheaper transaction costs than its peers, which comes in handy during astronomical gas rates on the Ethereum network, is one of the elements of LRC’s monster climb this month.
On Nov. 3 (the red circle in the figure), the number of daily tweets mentioning the project outpaced the monthly average by more than 740 percent, as the asset approached the local price peak of $1.54. LRC proceeded to surge even higher after a brief correction, spurred by the rush of social media, eventually exceeding $2 six days later.
NU/USD: A 598.87% increase in tweet volume triggered a +179.18% monthly price change
Nobody knows where NU’s 10x+ pump on Oct. 15 came from, but it saw the currency jump from $0.30 to almost $3 in a matter of hours. Some Twitter users attributed the increase to its listing on the South Korean exchange Upbit, but there’s a good possibility there was something more at work. People were most likely just attempting to figure out what was going on.
In any case, barely two hours into the rise, the Unusual Twitter Volume indicator began to flash, with the maximum rate appearing immediately before the price high of $3.17. Surprisingly, social buzz over NU remained for a while despite the dramatic price drop, fading barely a day after the price plummeted back to roughly $1.20.
SAND/USD: A 328.12% increase in tweet volume was followed by a +222.12% monthly price change
Following the Facebook/Meta announcement, the Sandbox was yet another metaverse marvel whose token price surged.
SAND’s positive social outlook was evident when its daily tweet traffic more than quadrupled compared to the month-to-month average, reaching a new high of over 2,600 tweets 15 hours before the stock reached a high of $3.38.
Granted, an unusually high number of tweets referencing a certain item isn’t a guarantee of a price increase in the near future. To make an informed judgment, traders should look into the actual background of what is going on surrounding the coin. Being alerted to significant jumps in interest in specific assets, on the other hand, maybe extremely helpful in focusing one’s study on the most probable possibilities for a prolonged rally.