Crypto YouTube channels paint a good picture of investor sentiment. The crypto research company Delphi Digital has therefore determined that corresponding data can also be used to time the market.
• Development in crypto YouTube channels shows sentiment in the general population
• Professional investors use retail investor sentiment as a counterindicator
• Small investors probably still listless after the 2022 crypto bear market
Given the volatility on the stock markets, determining the best possible time to trade is an important success factor for investors. According to Delphi Digital, analyzing the viewer behavior of popular crypto-related YouTube channels is a good way to skillfully choose the right time to buy or sell crypto. This can provide insights into the mood of retail investors and upcoming market trends.
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Crypto YouTube channels are sentiment indicators
Data such as the number of hours watched on crypto-related YouTube channels and the number of subscribers to such channels can be used as a sentiment indicator of how the general population feels about the crypto market and to predict important market highs and lows.
“Analyzing the relationship between average weekly views and subscriber growth or decline of popular crypto-related YouTube channels should shed more light on retail investor engagement,” Delphi Research analyst Priyansh Patel wrote in a note to clients, according to CoinDesk. He continued: “While the use of these alternative metrics is far from perfect, they provide valuable insight into market developments and the impact of retail investor participation.”
Counter indicator
Retail investors are usually the last to jump on a rally or exit the market. Their decisions are often based on freely accessible sources of information such as YouTube channels. Consequently, an increase in viewership on these channels, as well as Google search trends, for example, can be viewed as a counterindicator.
Experienced traders and professional asset managers in particular use such sentiment indicators, which are oriented towards small investors, as counter indicators. They buy when retail investor sentiment is too pessimistic and sell when their sentiment is too optimistic.
Delphi shows how the development of views and subscriber numbers of popular channels in the past have actually mimicked the crypto boom-bust cycles with the following example: For example, the weekly increase in the number of subscribers and viewers of “The Moon” and “Ivan on Tech” It peaked at the beginning of 2021, just as Bitcoin climbed above the $60,000 mark for the first time and soon collapsed to $30,000.
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