🚀 Do Emojis Hold the Key to Successful Crypto Trading?
posted 20 Feb 2024
Researchers found that emojis expressing positive emotions in social media posts can predict upward trends in the cryptocurrency market.
Frequency of emojis in the training dataset Source: arxiv.org
They conducted an experiment using Chat GPT-4 to analyze posts related to cryptocurrency on X. By purchasing BTC when positive sentiments were detected through emojis and selling it the next day, the researchers achieved consistent profit, outperforming standard market trends.
Profit of Algorithm 1 compared with market trends Source: arxiv.org
This suggests that optimistic social expressions, particularly through emojis, might mirror the broader optimism of investors, potentially shaping market directions.
However, the strategy didn't consider trading fees and probably many other crucial factors that could influence the experiment's outcomes. Thus, it might not be advisable to use this approach for personal trading decisions.
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