An interdisciplinary researchers’ group, belonging to Europe and Asia, has supervised a study to decide whether social media-based emojis are capable of anticipating positive crypto trading results, as stated by Cointelegraph.

According to Cointelegraph, the group’s preprint research paper stated that emojis implying optimistic attitudes suggested positive market behaviour. “The strong predictive link between high positive sentiment levels and subsequent BTC price increases suggests that optimistic social media discourse, as encapsulated by the most positively perceived emojis, acts as a barometer for market sentiment. It may reflect broader investor optimism, potentially driving buying behaviour and influencing market trends,” the paper mentioned. 

Based on Cointelegraph’s data, for finding the correlation between emojis and optimistic sentiment over cryptocurrency trading, researchers made use of X, previously known as Twitter. From what it’s understood, the group utilised GPT-4 for parsing cryptocurrency post-oriented data sets displaying emojis by sentiment. After creating an algorithmic system for utilising the sentiment analysis to bolster next-day trading, the group developed a schedule that in case the bot exhibited positive emoji sentiment for a particular day, the group purchased a Bitcoin and sold it the immediate next day. Insights from the study suggested that the entire methodology consecutively reaped positive yields which overtook normal market trends. 

“A ‘time pace’ of 30 to 40 days offers a balanced window that is sufficiently long to integrate meaningful sentiment trends and short enough to remain responsive to recent shifts,” the researchers mentioned. Moreover, Cointelegraph noted that the researchers’ trading approach didn’t take into consideration trading and other related expenses, along with algorithm testing against a strategy which included BTC buying on a daily basis and selling it the following day. 

(With insights from Cointelegraph)

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