Relationship Between Twitter Sentiment Analysis and Bitcoin Prices: Econometric Analysis of Long and Short Term Dynamics

Authors : Çağrı Ulu, Cansu Ulu

Pages : 605-626

Doi:10.25229/beta.1432142

View : 54 | Download : 69

Publication Date : 2024-06-30

Article Type : Research Paper

Abstract :The significance of social media in influencing cryptocurrency pricing has grown considerably in recent years. This study aims to explore the correlations between social media sentiments and Bitcoin pricing, both in the short and long terms, while also investigating the direction of these relationships. Sentiment analysis was conducted using the TextBlob model, which uncovers the underlying meaning in text through analysis. The study tested the hypothesis that there exists a relationship between sentiment analysis scores and Bitcoin prices over both short and long periods. Ensuring stationarity was crucial for time series analysis, involving the use of structural break and traditional unit root tests. Daily data from June 2021 to June 2022 was examined, with December 2021 serving as the focal point due to a peak in Bitcoin prices. The study focused on Bitcoin price data and sentiment analysis scores. Results revealed Twitter data as the dependent variable, showing no long-term relationship with Bitcoin prices. However, a significant and positive relationship was observed in the short term. This research contributes valuable insights into the intricate dynamics between social media sentiments and cryptocurrency pricing.
Keywords : Bitcoin, Twitter, Sentiment Analysis, ARDL Bounds Test, Text mining