Bitcoin Rallied In May As Tweet Volume Hit 8-Month High

Story by: Charles Bovaird

Bitcoin prices surged in May, pushing higher as the world’s most prominent digital currency benefited from strong sentiment and robust social media activity.

The cryptocurrency rallied as much as 72% during the month, rising from a low of roughly $5,280 to almost $9,100 near the end of May, CoinDesk price data revealed.

Month-over-month, the digital asset’s price increased more than 60%, additional CoinDesk figures show.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Rising Tweet Volume

This upward trend took place as bitcoin’s 30-day average tweet volume climbed for 17 straight days, reaching an eight-month high on May 28th, according to data provided by cryptocurrency analytics platform TheTIE.io.

“At 17 days of consecutive growth, BTC is seeing its longest streak of increased 30-day average tweet volume since 2017,” said Joshua Frank, cofounder of TheTIE.io.

The chart below illustrates the relationship between this average tweet volume and bitcoin’s market capitalization (market cap).

30-day average tweet volume vs. market cap

30-day average tweet volume vs. market cap

THE TIE

“Tweet volume is very strongly correlated with market cap for bitcoin,” noted Frank.

“The correlation between 30 day average tweet volume and market cap is r=.86.”

He provided additional figures that helped show the strength of bitcoin’s social media activity during the month.

“We recorded two days with 40,000+ Bitcoin Tweets in May 2019. The last time that happened was in July 2018, 10 months ago,” stated Frank.

“Between December 7th 2018 and April 2nd 2019 there were 0 recorded days with over 30,000 Bitcoin tweets. In May 2019 alone there were 19 days with over 30,000 Bitcoin tweets.”

Trader Optimism

Bitcoin’s strong May took place as the digital currency benefited from sustained optimism.

Frank spoke to this situation, providing some notable statistics.

“Bitcoin’s 100-day average sentiment score has remained positive for the last 101 days,” he emphasized.

“As sentiment has remained positive, sentiment volatility is near the lowest levels we have recorded,” added Frank.

The chart below helps depict bitcoin’s average sentiment and the fluctuations in these generalized feelings toward the digital asset.

Bitcoin's 100-day average sentiment and sentiment volatility since January

Bitcoin’s 100-day average sentiment and sentiment volatility since January

THE TIE

Climbing Price Volatility

Bitcoin’s price volatility rose during the month, lingering at reasonably high levels during the last few weeks.

Data provided by U.S. asset manager Blockforce Capital helped shed further light on this development.

“Bitcoin’s price generally rose for the month of May and volatility went with it, spending the last two weeks of the month hovering around 85-90,” said David Martin, chief investment officer of Blockforce Capital.

“This high level of volatility is expected from an emerging asset like bitcoin, but was relatively absent for the latter half of 2018,” he noted.

“In fact, volatility for the first five months of 2019 was about 15% higher than the volatility during the last five months of 2018.”

“A 15% increase in long-term volatility may not seem like much, but it bumps the asset back in-line with long term averages.”

Original story: https://tinyurl.com/yy9gy7sb

 

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