US, WASHINGTON (ORDO NEWS) — In 2017, while Ether was experiencing great price growth, the daily number of tweets mentioning Ethereum increased together, to an average of 12,622 tweets per day.
Likewise, when Ether was down 78.6% in 2018, activity on Twitter suffered. The following year, 2019, some correlation continued to be observed between the two variables.
Interested, analysts sought to find out if the number of tweets mentioning Ethereum could allow investors to make predictions on the price of ETH. Their conclusions are very surprising.
Study of the impact of the number of tweets on ETH from 2017 to 2020
Analysis of the correlation between the daily volume of Ether transactions and the daily number of tweets mentioning Ethereum revealed a significant correspondence between these two variables in 2017.
Analysts thus discovered that during the year, a 1% increase in the number of tweets was followed by a 1.612% increase in the volume of ETH exchanges during the same day, then by 1.584%. the next day.
In 2018, the relationship between tweets mentioning Ethereum and the volume of transactions also remained positive. However, compared to 2017, the relationship was weaker. During the year, a 1% increase in the number of tweets was followed by an increase of 0.321% in the volume of ETH transactions and 0.296% the following day.
Despite this constant positive correlation between the tweets mentioning Ethereum and the volume of ETH transactions over the years, 2019 was marked by an inverse relationship between the two variables . When the tweets increased by 1%, the volume of ETH exchanges decreased by – 0.167% and by – 0.222% the following day.
This is particularly interesting, because in 2019 Ether experienced a total negative return of -2.86%. It seems that the increase in tweets has had the effect of reducing the volume of ETH’s purchases and sales , which has led to poor prospects for investors.
2020: will we observe the same correlation as that of 2017?
At the start of this year, the ETH increased from around $ 130 to $ 274 in mid-February , representing a gain of 111%. Then, the entire market underwent a correction that lowered the price of the cryptocurrency to $ 86. Currently, it has risen slightly and is trading slightly above $ 120.
Interestingly, we note that the number of tweets mentioning Ethereum rose and rose an average daily number of 3,218 in January to an average of 4,355 between 1 st February and 5 March, with notable peaks between February 13 and 28.
Conclusion: according to analysts, even if the number of tweets seems to have a link with the price of Ether, this link is too loose to be used to predict the returns of Ether in 2020.
However, the relationship between the number of tweets and Ether volume is evident. When tweets mentioning Ethereum increase by 1%, Ether exchanges increase by 1.265%. Information that investors can use in their short-term investment decision-making.
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