BTC Sentiment Analysis in News: A Comprehensive Study
Abstract
The sentiment analysis of Bitcoin (BTC) in news articles has become a crucial aspect of understanding market dynamics and investor behavior. This study aims to explore the impact of news sentiment on BTC prices and volatility using advanced machine learning techniques and natural language processing (NLP).
Introduction
Bitcoin, as the leading cryptocurrency, has been subject to various market influences, including news sentiment. The sentiment in news articles can significantly affect investor decisions and market trends. This study investigates the correlation between news sentiment and BTC price movements.
Methodology
Data Collection
We collected news articles related to Bitcoin from various sources including financial news websites, social media platforms, and forums. The data was gathered over a period of one year, ensuring a comprehensive dataset for analysis.
Preprocessing
The collected data underwent rigorous preprocessing steps including tokenization, stemming, and removal of stop words to enhance the quality of sentiment analysis.
Sentiment Analysis
Using NLP techniques, we classified the sentiment of each article into positive, negative, or neutral. We employed machine learning models such as Naive Bayes, Support Vector Machines (SVM), and Long Short-Term Memory (LSTM) networks to analyze the sentiment.
Correlation Analysis
We analyzed the correlation between the sentiment scores and BTC price changes. We also examined the impact of sentiment on price volatility using statistical methods.
Results
Our findings indicate a significant correlation between news sentiment and BTC price movements. Positive sentiment in news articles was found to have a positive impact on BTC prices, while negative sentiment was associated with price declines. Additionally, high sentiment volatility was linked to increased market volatility.
Discussion
The results suggest that news sentiment plays a vital role in shaping BTC market dynamics. Investors and traders can benefit from sentiment analysis to make informed decisions. However, it is crucial to consider other market factors alongside sentiment analysis for a comprehensive understanding.
Conclusion
This study provides valuable insights into the relationship between news sentiment and BTC prices. The integration of NLP and machine learning techniques offers a robust framework for sentiment analysis in the cryptocurrency market. Future research can explore the long-term effects of sentiment on market trends and the development of more sophisticated sentiment analysis models.
References
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[2] Kim, D., & Kim, H. (2011). The impact of news on stock market returns and volatility: Evidence from the US and Korea. Journal of International Financial Markets, Institutions and Money, 21(3), 457-474.
[3] Hochreiter, S., & Schmidhuber, J. (1997). Long Short-Term Memory. Neural Computation, 9(8), 1735-1780.