A team of researchers from Europe and Asia developed two algorithms capable of predicting the success of cryptocurrency trading and overall trends in the crypto market by analyzing the use of emojis on social media.
Yao-Tsung Chen, Xiaorui Zuo, and Wolfgang Karl Härdle, researchers from universities in the PRC, Taiwan, and the EU, discovered that analyzing emojis on social media can forecast the mood online and, consequently, predict short- and long-term trends in the crypto market.
According to the researchers’ preliminary findings, emojis associated with positive sentiment online can predict positive market movement with almost 100% accuracy.
The scientists developed two AI-based algorithms that analyzed emojis, leveraging their predictions for investments. The team utilized the GPT-4 artificial intelligence system to analyze messages on social network X. When the chatbot detected a substantial number of positive emojis in crypto-related posts throughout the day, the team bought BTC and sold the asset the following day. This approach contributed to steady revenue growth.
Among the most indicative emojis signaling a high level of positive sentiment in the crypto market and investor optimism, driving purchasing behavior, and influencing market trends, the researchers identified:
- a rocket (🚀);
- a check mark (✅);
- fire (🔥);
- a chart (📈).
The scientists also determined the best time pace for collecting data capable of predicting long-term movements in the crypto market. They discovered that the prevalence of positive emojis in tweets for 30-40 days signals bullish trends.
A recent case study showed that using images of smiling people in marketing materials helps projects raise an average of about $2.91 million more funds during ICOs.
