As we’ve said before, fundamental research is very important for cryptocurrency trading or any other trading. If you know that a specific coin has a great future and believe in that coin, you can buy that coin / stock when the price is really low and when there is panic in the market. Then, when the price is high and other investors put confidence in the market, you can sell some of your holdings for a profit.
For doing the fundamental analysis, you have to be social. Don’t be nervous, you really don’t have to be social with other people, my dear nerd friends! I am talking about scouring through social media to get the pulse, and CoiningAI’s latest tool — http://coining.ai/social.html will help you!
Most of the times, the prices of cryptocurrencies doesn’t make any sense. You think you have seen all the crazies, but then the next crazy thing happens. Within all these crazies, there are patterns, if you can find them!
There are several different platforms where social buzz can occur. For instance, if a coin is consistently mentioned in YouTube videos, on Twitter, in the news, or has an active subreddit, and its available through different exchanges with multiple pairs to buy it (with BTC, ETH, etc), then it’s likely the price will pick up today or tomorrow.
If a coin suddenly gets more social buzz, that also reflects in short-term price change (either positive or negative) as well, depending on the type (positive or negative) of buzz.
However, being social and tracking that buzz is easier said than done. Let’s first talk about simple way of identifying the social buzz.
Let’s start with Twitter. You have to find all the tweets that contains a particular cryptocurrency. Let’s take Verge (XVG) as an example. Here is a tweet that contains the word verge, but it is definitely not about the cryptocurrency Verge!
Let’s say you apply another level of filtering by considering only the tweets in the “cryptocurrency” context. This is already a non-trivial problem, and unfortunately, this still does not solve the issue. Here are a few examples:
This problem is not only with Verge, as it also applies if you want to search with the coin symbols, such as ETC, or Ethereum Classic. The word “etc” will match against many keywords, even for the tweets related to cryptocurrencies, but they might not refer to Ethereum Classic.
There are many more examples. If you are not careful, Neo-Nazi will match against one of my favorite coins NEO, subreddits will match SUB, Economic status-quo will match SNT, just to name a few examples.
You face the same problem with News and YouTube search results. First you have to build the system that can monitor all the buzz 24/7, but your system needs to be “intelligent” and able to filter out the inappropriate results. This is where the AI of the Coining AI comes in!
We at CoiningAI are building systems to monitor social media 24/7 and apply AI on the results to filter and count the information appropriately. We are releasing the first beta version of it now, but we will continually work to improve our AI system.
Our article on how you can do your own research: http://bit.ly/CoiningDYOR describes the coin detail page, where you can see the AI’s filtering in action for news results, YouTube results and an About page where we aggregate the appropriate details for that coin, along with a Wiki description if available and, in some cases, CoiningAI’s own summaries. Again, it is still work in progress and if you find some obvious errors, please let us know.
After we monitor and extract the appropriate information from social channels, we need to rank the coins by combining and analyzing all of the information. First, let’s go over the platforms we are considering for SocialRank and how we are collecting and calculating the ranks for it.
To understand the social buzz, we are monitoring Twitter and YouTube. To understand the mainstream media buzz, we are monitoring news outlets. For community support — we check the active users on the coin subreddits, which is also a kind of social buzz metric. For adoption information, we monitor the exchange adoption.
We are collecting the news results from a third party partner for now. However, we are building a news search tool product for our sister company — Blackbird.AI. The Blackbird.AI news search tool has the AI functionalities for search built-in, so the results will be more accurate in coming days. If the AI-based news search tool in general interests you for any internet research, e.g. doing research for stock trading, journalism or anything, please feel free to contact us.
For Twitter, we are already using Blackbird.AI’s Twitter streaming and AI functionality. Note, the tweets we show in the coin detail page are only the tweets from the official Twitter accounts. In this case, however, the tweets come from any users for a more appropriate reflection of Twitter buzz. For Twitter results, we are considering the results of last 1 hour and last 1 day, though more weight relies on the most recent 1 hour results (to have the score give more preference to recent spikes).
For YouTube, we monitor YouTube results 24/7 for last 1 hour, 1 day, 1 week, and 1 month. You can see the results in our coin detail pages, e.g. ETH (check YouTube tab). To calculate the YouTube rank, we consider the combination of “total results” and the “view count” of top results for last 1 hour and 1 day, with more weight on last 1 hour results, similar to Twitter results.
For Reddit, we rank by the current active users in the coin subreddits. This gives a good indication of community support and social buzz about that coin. Furthermore, if a coin suddenly gets lots of attention, more people go to the Reddit page to understand what’s going on.
Exchange adoption is calculated by how many exchanges have the coin and how many pairs (e.g. NEO/BTC, NEO/ETC, etc) there are, with the higher that number is the better. When a coin becomes more popular, more people want to trade it, more pairs for trading become available. So this is a good indication of a coin gaining popularity and getting traded more, which results in higher trading volume and more adoption.
Finally, we aggregate the Github commit counts. This is not necessarily a good indicator of the price, but it is a good indicator to understand if there is a solid team of developers behind a coin. For some coins, partnership is also more important, and a coin could just commit many times a day with minor changes. So this is not something we want to consider for ranking coins, but we will show it in our coin detail page. This way if a coin seems suspicious, people can easily check the Github activities to consider it as a factor to judge if it’s really a scam or not.
This is a work in progress, but our coin detail page will have these information (along with Github activities). It could eventually look something like this:
One thing to understand is that mainstream media is all about Bitcoin. Check all of the news about cryptocurrencies, and almost all of it is related to Bitcoin. For top coins, you see some other news as well, but in terms of the number of news articles, there’s no comparison. On Twitter/YouTube, we have more mentions of other coins than with news outlets, but it’s still nowhere near the amount of Bitcoin.
Here is a screenshot of Twitter buzz from the last 1 hour from when this was posted. We show the relative volume, which means we take the maximum count and divide all of the counts by maximum count. This means that if you have seen 100 tweets related to Bitcoin, there were ~53 tweets about Ethereum, ~14 tweets about Litecoin / Ripple, ~3 tweets about Tron and so on. If you check our http://coiningnews.com and go to the Twitter tab, which shows cryptocurrency tweets in real-time, you will get similar stats too, depending on what people are talking about at that time. You can see here, Doge is the unexpected coin in the top list. But Doge is one of the most popular coins for social media memes, which gives it more visibility and eventually drives its price. However, as you can see in our overall ranking, Doge is not in top 10 because the other platform scores are not as high. But it’s increasing, so is the price of Doge!
It is also challenging to calculate the overall social score. We cannot just take relative volume for the overall social score, because in that case, everything other than Bitcoin is usually negligible. As a result, their rank in one platform does not reflect as much in overall ranking. Furthermore, the score from another platform where the scores are closer to Bitcoin (e.g. Reddit active users), dictates the ranking more. We solve this problem by preserving the rank and giving a rank probability score.
Combining all the platform ranks, we get the Social Ranking. This tells us, based on social buzz, mainstream media buzz, and exchange adoption, how the coins are ranked. We calculate the Rank difference by taking the difference in ranks between Social rank (http://coining.ai/social.html) and current coin rank (http://coining.ai/coins.html based on market cap, trading volume and normalized price). This difference tells us if the ranking based on social buzz is different from the current coin ranking.
Essentially, the Social Ranking gives a sense of overpriced and undervalued coins in general. At the same time, if something picks up on all platforms, there is a high chance that an increase in price will happen in the coming hours.
For example, in the screenshot above of #SocialRank (screenshot taken on 15 February, 2018), you can see Litecoin is #3, whereas on the screenshot from 16 February, 2018, Ripple is #3. Yesterday, Litecoin was experiencing a huge price increase, so it matched well with social media buzz. However, it seems so far that Litecoin on all the platforms in general is more popular than Ripple. Today, or now at least, Ripple seems to be #1 on YouTube buzz ranks, though, which helped it to get to overall #3.
This is essentially an early indication of price increase. Influencers talk about a coin first in YouTube, then it gains more buzz on Twitter and Reddit, then the mainstream media and price follow. It’s this sort of analysis of the patterns that help understand how price increases follow from these social rankings.
The next comparison is against the Bitcoin Cash. I personally like Litecoin significantly better than Bitcoin Cash and it seems that Litecoin has much better general social buzz compared to Bitcoin Cash as well. The question is, however, is Litecoin going to exceed Bitcoin Cash in terms of market cap and trading volume? It should, but whether or not it happens is hard to predict. Even if it does happen, it won’t occur in a matter of one day.
Next, if you check the ranking, one significant difference is for Monero. Monero’s coin rank with the combination of current market cap and trading volume is 10 spots behind when compared to Social Rank. This means that, with all the increased social buzz, it should be ranked much higher, but that is not reflected in price yet. Thus, Monero could be a good investment and you’ll want to monitor Monero in coming days to see if they can maintain the social and news buzz.
Finally, I will give an example of another extreme: negative rank difference. This means that a coin has much higher value and rank compared to the social buzz it gets. If you check the list, the first prominent coin you would notice is Cardano (ADA). It is a great coin with great future, but it’s priced as if future accomplishments have already occured. Furthemore, it is still not maintaining the same interest from social media and mainstream media, so price is likely not to stay at this level. Or, it might just maintain and increase the price just fine. This tool is helping you find coins that are overpriced or undervalued, but you have to be the judge and decide if these prices make sense to you. You would do that by going to the coin detail page, clicking the coin name from our rank lists, and checking the YouTube videos, news, reddit page, official Twitter posts, and all the information housed there.
One main reason for overpriced coins is because of significant coin supply. You would see the same thing again and again. For example, Ripple (100B supply), Cardano (45B), Stellar (100B), TRON (100B). These are all great coins. I specifically see a great future for Ripple, Cardano and Stellar, but I’m not very sure about Tron just yet. However, these coins are usually slightly overpriced compared to what their price should be, which is caused by the coin having a significant maximum supply and less current supply, thus the coin price seems low, but the actual price is pretty high. If you check the normalized price (http://coining.ai/price.html), which is calculated considering the same number of coin supply as Bitcoin and gives a good understanding of the price you are actually paying for the coin and if it is overpriced. If the normalized price is unexpectedly high for a coin, it is likely to fall sometime soon. Our article explaining the feature (http://bitly.com/CoiningAI) gives a understanding of the coin price.
We thought to include price rank (lower USD price, higher rank) in our social rank as well to capture the current market psychology, but it seemed in some ways that we were encouraging this wrong behavior, so we intentionally did not include the price rank in our social rank. The current buzz represents this rank and we hope the market will mature and will understand the normalized price better and price the coins more appropriately. But understanding the market psychology will help you to make some good trades in short term.
We present in this article CoiningAI Social Rank, combining YouTube / Twitter /News buzz, active Reddit users and exchange adoption. We use AI (Artificial Intelligence) to extract the necessary information to count the social media buzz appropriately. The Social Rank will help us better understand how a coin is ranked based on social buzz. With the rank difference, we can understand if some coins are overvalued or underpriced. By monitoring the rank changes, the overall ranks, and specific platform ranks, you will be able to find out the price changes before the rest of the people in the market. Let us know how you find the tool useful and how you are using it. Our AI is continuously improving and the results will improve more in coming days. We are very eager to get your feedback on improving our tools.
Have fun trading cryptos and Happy Coining!
P.S. We are not responsible for any trading loss. Please consult your financial advisor for suggestions.
P.P.S. If you enjoyed and learned from this article, please share with others in the social media and clap 👏🏽👏🏽👏🏽 to help others find the article. Thanks in advance.
About http://Coining.AI: We are building Artificial Intelligence Driven Crypto-Currency Tools using a Revolutionary Proprietary Platform.
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