In the beginning of 2018 we have introduced a market timing indicator based on social media sentiment of cryptocurrencies, where the sentiment is determined with machine learning from texts of social media posts.
For more detail and some of past warnings see e.g. our blog post from March of 2018:
The market timing indicator was again correct recently, in flashing warnings before the latest fall in cryptocurrency prices. As you can see in the picture below:
it actually gave two warning signals in a short period of time. In a way the latest warnings were even more worrisome. The market indicator gives a warning when all among the top 10 cryptocurrencies in terms of market cap have a positive daily change in sentiment. In a sense it measures short-term excess optimism. But unlike most of previous cases this time was no major price jump before the warnings. In other words, despite a lot of excess optimism about bitcoin and sector in general (due to positive news on Bakkt and many others), there was almost no price change. If the price does not move on such optimism then it is likely that the upside is limited and downside can be large on potential negative impact news.
This is indeed what happened subsequently after the warning signals, a sharp drop in bitcoin and other crypto prices:
Our market sentiment indicator is part of our subscriptions, learn more about it at: