Thomson Reuters Corp has just released a new version of their MarketPsych Indices, a product introduced in conjunction with MarketPsych Data LLC, a behavioural economics research firm. This new version comes with a Sentiment Gauge that analyzes online chatter including news and social media posts about the the largest crypto-asset bitcoin.
The MarketPsych Indices aims to provide sentiment analysis on the top crypto-assets to determine the confidence of the market. The index methodology uses an artificial intelligence and machine learning technique to crawl through 50,000 websites and 4 million social media posts.
Analyzing chatter and online sentiment about market happenings is not an exclusive technique for crypto-assets alone. Traders in the traditional market use sentiment analysis often. However, the crypto markets are highly volatile and subject to sever price swings due to bullish or bearish news. The positive or negative news stories can spread quickly throughout a web of crypto news sites, social media and forums.
The Thomson Reuters Market Psych index aims to trawl through this massive amount of media to return a concise actionable figure. This Sentiment Gauge will scan thousands of websites, some of which focus only on cryptocurrencies. Thomson Reuters in a statement announcing the release said the scan aims at capturing market-moving sentiment and themes.
Some parameters in the sentiment gauge include volume of entries in search engines like Google for the word “bitcoin” and other related words. To date search interest for ‘bitcoin’ on google trends has been a strong indicator of price movements.
Austin Burkett, Global Head of Quant and Feeds at Thomson Reuters, had this to say:
“News and social media are driving the investment and risk management process more than ever with the continuing rise of passive and quant-driven trading”
