After dropping below $ 4,000 in March 2020, Bitcoin (BTC) showed bullishness and broke the record for 2017, recently reaching close to $ 42,000. During this time, Bitcoin’s activity on Twitter was worse compared to the price.
If we look at the information from the encrypted data service, TIE shows that the Bitcoin price has outpaced the lack of activity – an account showing the volume of tweets compared to the volume of traded assets – since 2019.
“The activity-to-activity ratio measures the number of tweets per coin per million dollars of recorded trade for that coin,” Joshua Frank, CEO of The Tie, told Cointelegraph. According to research from The Tie, published in August 2019, the average activity-to-activity ratio in the industry was 1.02.
The Bitcoin injection on Twitter overlapped significantly with the Bitcoin price for much of 2018, dropping to bypass the price for a short period in May 2019. The Twitter injection continued to decline and fell below the price in the second half of May, and has remained below the price since then. Then. Even during Bitcoin’s recent peak on January 8, 2020, the digital asset only had 1.24 points from Hype-to-Activity, slightly above the industry average.
However, mainstream media coverage has increased since October 2020. With the bitcoin price rising sharply, the asset is getting more attention, which was seen during the rally in 2017 to nearly $ 20,000. Bitcoin has increased in value since October, which reasonably reduces media interest.
A number of major companies such as MicroStrategy and Square began announcing purchases of Bitcoin in 2020, which affected the situation. “It’s clear that the Bitcoin rally was led by institutional investors,” Frank told Cointelegraph on Monday, adding:
Since Bitcoin crossed $ 20,000 in December, the average Bitcoin Tweet volume for 30 days has been half of the highlights in 2017/2018. The lack of conversations on Twitter indicates that a few large investors originally bought, rather than a large number of small investors. ”
Using tweets according to market capitalization, the NVTweet Ratio data from The Tie provides a basis for informing the bitcoin price dynamics being driven by the major players, according to Frank. However, recent data indicates an increase in the number of dealers, and some of it has been reflected in tweets about BTC. The record that Twitter mentions about Bitcoin came around the same time as Bitcoin’s recent correction. Frank added:
Overall, we found that very high sentiment, along with abnormally high Twitter activity, tended to be a negative signal for Bitcoin’s price in the short to medium term. Bitcoin’s long-term sentiment approaches (a measure of how positive the conversation has been over the last 50 days. Compared to 200 days prior) from an all-time high.
Bitcoin’s price recently fell about 28% from the high, but has recovered somewhat since the drop at time of publication.