The Twitter Sentiment indicator uses IntoTheBlock’s proprietary classification machine learning algorithm to infer the connotation of messages discussing a particular crypto-asset and its ticker. These are plotted over time to track market sentiment and the level of activity in relation to a crypto-asset in Twitter.
Twitter Sentiment for Ethereum
The Twitter Sentiment indicator is helpful to gauge market participants’ emotions. Sentiment can be a leading indicator at times as was the case for Ethereum in June and July. In most occasions, though, sentiment tends to be a reactive indicator. In other words, there tends to be more positivity when prices rise and negative sentiment when prices fall.
Overall, Twitter Sentiment can be helpful to estimate the market’s current stance on a particular crypto-asset. However, due to its reactive nature, it should be used cautiously when trading.