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Read This To Capture Crypto Market Sentiment
By Manoj Dharra
We all know how important it is to sense the market sentiment if we are a participant or stakeholder in any way. Generally, social media is seen as an important tool to capture the mood of the market, but it should be regarded as only the first step towards our research. A wider assessment of market sentiment can be obtained using a variety of techniques. You might think about the following in addition to keeping an eye on social media (especially Twitter, considering its popularity among supporters of cryptocurrencies).
1. Track social mentions:
With data collection software tools.
2. Current News:
Utilize blogs and media portals to stay current on industry news. Examples include News Now, Decrypt, Bitcoin Magazine, CoinDesk, and CoinTelegraph.
3. Whale Monitoring:
An investor that holds and executes high value transactions across multiple blockchains is known as a cryptocurrency whale. On Twitter and Telegram, you may find free whale alert bots that allow you to set alerts or track the massive transactions performed by whales, use them.
4. Check market sentiment:
Pricing signals on CoinMarketCap, where a range of different sources and provide easy summaries of current market sentiment.
5. Measure the level of hype:
Surrounding a cryptocurrency with Google Trends. For example, a large search volume for “How to sell crypto,” could suggest that the market sentiment is negative.
Most market sentiment indicators are focused on Bitcoin (BTC), but you can also find Ethereum (ETH) sentiment indices.
The Bitcoin Crypto Fear & Greed Index:
Is perhaps the most known indicator of crypto market sentiment. The index shows Bitcoin market fear or greed on a scale of zero to 100 by analyzing five different information sources: volatility, market volume, social media, dominance, and trends.
The Bull & Bear Index by Augmento is a different sentiment indicator concentrating on social media. An artificial intelligence (AI) software analyzes 93 sentiments and topics using conversations on Twitter, Reddit, and Bitcointalk. The creators also back-test their indicator’s methodology with the years’ worth of data available. Zero is extremely bearish on the scale and one extremely bullish.
Defi Total Value Locked (TVL)
DeFi total value locked (TVL) is an accurate representation of the health of DeFi and its markets. TVL factors in the total current supply, the maximum supply, and the current cryptocurrency value.
Traders use the TVL ratio to assess whether an asset is overvalued or undervalued. Look for TVL ratio when the TVL ratio falls below 1, it typically indicates an undervalued DeFi asset.
Altcoin Gainers and Losers
ltcoin gainers and losers are the top-performing or crashing coins across various time periods. Here are some of the best altcoin gainers and losers trackers to aid your crypto investment strategies:
CoinMarketCap, CoinCodex, CoinGecko.
Market sentiment analysis tends to offer better results with more practice and experience, but it might not work in some cases. Make sure to do your due diligence before trading or investing because every decision involves a certain amount of risk.
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