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Title: Search Volume as a Forecasting Indicator Post by: niko on August 24, 2012, 05:35:46 AM Google search volume has been mentioned over and over again as a relevant indicator. Presumably, a spike in search volume is a bullish sign. Alternative explanations go along the lines of search volume following the price, not the other way around.
Here you can see overlapped historical bitcoin prices from MtGox with Google search volume for "bitcoin". Conveniently, the "exact" search volume scale (as opposed to the relative scale) mostly matches the USD exchange rate, so it's all on the same unnamed y-axis. Bitcoin price data are daily average, while google data are unfortunately compounded weekly. I have therefore placed google data points on the 4th day of the week. Also shown are the same data in log scale so no detail is lost in the valleys. What do you think? To me, the conclusion is obvious and solid, but I'll only post it here after others have commented. http://4.bp.blogspot.com/-EWEAKmC5ZWs/UDcNJ52voxI/AAAAAAAAABA/nw5yDd-uPBA/s1600/search_volume_price_lin.PNG http://3.bp.blogspot.com/-Pko6WI89Mjo/UDcNSd3-bsI/AAAAAAAAABI/8_7HbmLSb_A/s1600/search_volume_price_log.PNG Title: Re: Search Volume as a Forecasting Indicator Post by: Killerpotleaf on August 24, 2012, 05:42:00 AM this graph lead me to believe the resent dump of coins was a really dumb ass move.
on second thought... maybe it was a needed correction nvm ... still ... CONFUSED! Title: Re: Search Volume as a Forecasting Indicator Post by: Elwar on August 24, 2012, 12:58:29 PM The Bitcoin price is a good indicator of how the google search traffic will be.
Use it at your own discression! Title: Re: Search Volume as a Forecasting Indicator Post by: phatsphere on August 24, 2012, 01:15:04 PM yes, there is a correlation, but i don't think it's that easy to jump to any conclusions. the search volume is probably an aggregated value for the past 30 days, or even more. you don't know how exactly google does the calculation! the price doesn't have this kind of lag.
Title: Re: Search Volume as a Forecasting Indicator Post by: Gyrsur on August 24, 2012, 01:20:03 PM bitcoins are over-priced at the moment! :D
Title: Re: Search Volume as a Forecasting Indicator Post by: n8rwJeTt8TrrLKPa55eU on August 24, 2012, 01:58:17 PM The chart tells me that the only way to make money from this correlation...is if one could buy/sell a futures contract on search volume for the "Bitcoin" keyword :)
Title: Re: Search Volume as a Forecasting Indicator Post by: proudhon on August 24, 2012, 02:12:00 PM The Bitcoin price is a good indicator of how the google search traffic will be. Use it at your own discression! If only we could short Google search volume. Title: Re: Search Volume as a Forecasting Indicator Post by: cypherdoc on August 24, 2012, 03:07:12 PM The Bitcoin price is a good indicator of how the google search traffic will be. Use it at your own discression! If only we could short Google search volume. proudhon, you are one handsome bull! ;) Title: Re: Search Volume as a Forecasting Indicator Post by: bitcoinBull on August 24, 2012, 03:30:45 PM the search volume index is charted at percentage scale, btw. you're comparing it to bitcoin price in linear scale and log scale.
Title: Re: Search Volume as a Forecasting Indicator Post by: augustocroppo on August 24, 2012, 03:52:38 PM Google search volume has been mentioned over and over again as a relevant indicator. Presumably, a spike in search volume is a bullish sign. Alternative explanations go along the lines of search volume following the price, not the other way around. So, where you got the data for the graph? Share your references, so anyone can verify the data reliability. Title: Re: Search Volume as a Forecasting Indicator Post by: notme on August 24, 2012, 03:59:00 PM What I see is a trailing indicator: price moves and then search volume follows. In other words, not particularly useful. It's only useless until someone starts a google search volume futures exchange. Title: Re: Search Volume as a Forecasting Indicator Post by: niko on August 24, 2012, 04:17:08 PM Google search volume has been mentioned over and over again as a relevant indicator. Presumably, a spike in search volume is a bullish sign. Alternative explanations go along the lines of search volume following the price, not the other way around. So, where you got the data for the graph? Share your references, so anyone can verify the data reliability. Search volume is available from google, e.g. https://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=ytd&sort=0 Quote 9. How is the data scaled? The data is scaled based on the average search traffic of the term you’ve entered. There are two modes of scaling – relative and fixed – and the only difference between them is the time frame that’s used to calculate the average. However, fixed scaling is only available as a .csv export. Please note that the ability to see numbers on the graph and to export this data with either mode of scaling are available only after you’ve signed into your Google Account for Trends. Bitcoin prices were obtained from bitcoincharts.com, compounded daily as described in OP. the search volume index is charted at percentage scale, btw. you're comparing it to bitcoin price in linear scale and log scale. According to Google: Quote In fixed mode, the data is scaled to the average traffic for your term during a fixed point in time (usually January 2004). In our example, 1.0 would be the average traffic of dogs in January 2004. If you chose 2006 as your time frame, you would be comparing data for dogs in 2006 to its data in January 2004. Since the scale basis (1.0) doesn’t change with time, you can look at different time periods, and relate them to each other. (Note: For keywords without a historical record, it may not be possible to establish a fixed scale). It is not clear how they establish reference volume for keywords that didn't appear in 2004, but regardsless the scale is arbitrary and fixed. Anyhow, the values were close so I didn't bother including secondary y-axis, that is all. Title: Re: Search Volume as a Forecasting Indicator Post by: bitcoinBull on August 24, 2012, 05:12:24 PM bitcoincharts has a percentage scale option, and uses the start date of the chart as 100%. Choosing the same start date where you find 1.0 on a google chart would produce the most accurate comparison.
Title: Re: Search Volume as a Forecasting Indicator Post by: niko on August 24, 2012, 06:26:19 PM bitcoincharts has a percentage scale option, and uses the start date of the chart as 100%. Choosing the same start date where you find 1.0 on a google chart would produce the most accurate comparison. The y-axis scale is irrelevant. I wanted to track how changes in search volume and in price correlate in time. It doesn't even have to be on the same plot, as long as time scales are same we should be able to see what's happening.Title: Re: Search Volume as a Forecasting Indicator Post by: S3052 on August 24, 2012, 07:32:06 PM My take: Bitcoin enthusiasts are generally long on Bitcoin, and the general level of excitement/chatter/blagging/instant messaging on Bitcoin-related topics varies in response to the exchange rate. This chatting/blagging/instant messaging/etc. creates an ongoing flow of bored/reluctant girlfriends/family members/friends/work colleagues who go on Google to find out what all that 'Bitcoins' [sic] nonsense is all about. lol Title: Re: Search Volume as a Forecasting Indicator Post by: ElectricMucus on August 24, 2012, 07:46:37 PM makes sense ;D
Title: Re: Search Volume as a Forecasting Indicator Post by: mobodick on August 31, 2012, 12:22:30 PM bitcoins are over-priced at the moment! :D Yeah, according to googles graph bitcoin should be somewhere around $7. Title: Re: Search Volume as a Forecasting Indicator Post by: Yuhfhrh on September 05, 2012, 10:15:16 PM This is the reason I just went all in.
Title: Re: Search Volume as a Forecasting Indicator Post by: cypherdoc on September 05, 2012, 10:17:39 PM can someone update that google search graph after today's Romney Effect?
Title: Re: Search Volume as a Forecasting Indicator Post by: Yuhfhrh on September 05, 2012, 10:20:49 PM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) Title: Re: Search Volume as a Forecasting Indicator Post by: ElectricMucus on September 05, 2012, 10:23:17 PM That graph is always one day behind, todays result should be available tomorrow.
Title: Re: Search Volume as a Forecasting Indicator Post by: adamstgBit on September 05, 2012, 10:24:05 PM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) I think the price rising is what is causing more Google searches, and not the other way around... Title: Re: Search Volume as a Forecasting Indicator Post by: Yuhfhrh on September 05, 2012, 10:25:02 PM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) I think the price rising is what is causing more Google searches, and not the other way around... You don't think that they are intertwined? Title: Re: Search Volume as a Forecasting Indicator Post by: adamstgBit on September 06, 2012, 02:41:52 AM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) I think the price rising is what is causing more Google searches, and not the other way around... You don't think that they are intertwined? I do, But, Price effects Google searches, Google searches do not effect price Title: Re: Search Volume as a Forecasting Indicator Post by: Yuhfhrh on September 06, 2012, 03:17:56 AM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) I think the price rising is what is causing more Google searches, and not the other way around... You don't think that they are intertwined? I do, But, Price effects Google searches, Google searches do not effect price Google searches= more people understand bitcoin= more people buy bitcoin= less supply= higher price? If it wasn't for my google search, I would have never bought any bitcoins, and as a result the price would be a fraction lower. Title: Re: Search Volume as a Forecasting Indicator Post by: adamstgBit on September 06, 2012, 03:26:44 AM can someone update that google search graph after today's Romney Effect? I tried to check today's activity but google doesn't show today's results? http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0 (http://www.google.com/trends/?q=bitcoin&ctab=0&geo=all&date=mtd&sort=0) I think the price rising is what is causing more Google searches, and not the other way around... You don't think that they are intertwined? I do, But, Price effects Google searches, Google searches do not effect price Google searches= more people understand bitcoin= more people buy bitcoin= less supply= higher price? If it wasn't for my google search, I would have never bought any bitcoins, and as a result the price would be a fraction lower. I see your point, but you can imagine that when price is rising fast people search up bitcoin on Google a bit more. I guess its abit of both, and Google searchers and bitcoin price truly are intertwined Title: Re: Search Volume as a Forecasting Indicator Post by: niko on September 06, 2012, 03:53:22 AM If you look at the graphs, you'll find that most of data clearly shows that changes in price do not follow changes in search volume, but it's the other way around. Increase in price usually predicts future increase in the search volume. I know it sounds stupid and boring, but that's the fact so far.
Title: Re: Search Volume as a Forecasting Indicator Post by: S3052 on September 06, 2012, 07:40:55 AM If you look at the graphs, you'll find that most of data clearly shows that changes in price do not follow changes in search volume, but it's the other way around. Increase in price usually predicts future increase in the search volume. I know it sounds stupid and boring, but that's the fact so far. +1. this is exactly the way it works. Title: Re: Search Volume as a Forecasting Indicator Post by: Technomage on September 06, 2012, 08:44:56 AM That news is so big time. The BitInstant Debit card was the biggest news since Silk Road but this is something that could actually rival Silk Road press if there are further developments.
The interesting thing is that Bitcoin is actually the perfect currency for accepting ransom money. Accept cash and risk a meetup of some sort? Accept a bank transfer and risk being traced? A check? Everything else sucks compared to bitcoins. There we have it, the new big thing for Bitcoin. Ransoms! Title: Re: Search Volume as a Forecasting Indicator Post by: Spekulatius on September 06, 2012, 08:53:34 PM @ myself: Do you know what blogs (number, area of interest, language, networks,..) are actually searched? Cant find any info on the page.
Title: Re: Search Volume as a Forecasting Indicator Post by: cypherdoc on September 06, 2012, 08:55:48 PM can someone update that google search graph after today's Romney Effect? https://i.imgur.com/UndJc.png http://trend.icerocket.com/trend?query1=bitcoin&days=30 https://i.imgur.com/C4k9n.png http://trend.icerocket.com/trend?query1=bitcoin&label1=&query2=&label2=&query3=&label3=&query4=&label4=&query5=&label5=&days=90 there u have the romney effect https://i.imgur.com/vqlZz.png bitcoin 26.50 0.0018 795 EURUSD 63.17 0.0042 1,895 cryptocurrency 0.63 0.0000 19 USDJPY 38.30 0.0025 1,149 alternative currency 30.13 0.0020 904 http://trend.icerocket.com/trend?query1=bitcoin&label1=&query2=EURUSD&label2=&query3=cryptocurrency&label3=&query4=USDJPY&label4=&query5=alternative+currency&label5=&days=30 superb! up we go! Title: Re: Search Volume as a Forecasting Indicator Post by: Technomage on September 06, 2012, 09:12:29 PM The Romney effect is starting to reach EPIC levels. Multiple mentions of Bitcoin on CNN TV. On top of that we have this article: http://edition.cnn.com/2012/09/06/politics/romney-tax-threat/index.html
Multiple paragraphs on Bitcoin. Already 4000 comments. It's time to post the rocket pictures, truly. Title: Re: Search Volume as a Forecasting Indicator Post by: FreeMoney on September 06, 2012, 09:23:40 PM If you look at the graphs, you'll find that most of data clearly shows that changes in price do not follow changes in search volume, but it's the other way around. Increase in price usually predicts future increase in the search volume. I know it sounds stupid and boring, but that's the fact so far. +1. this is exactly the way it works. YES exactly. Thanks for pointing this out. Tired of the ol' physics argument... it doesn't work for markets That is how it worked in the past. But if a big media 'event' is sudden it can hit before corresponding price increase imo. Also if the news is about the price increase it has to come after the increase and that's what a lot of the news was last time we had a ton of news. Title: Re: Search Volume as a Forecasting Indicator Post by: cypherdoc on September 06, 2012, 09:30:00 PM If you look at the graphs, you'll find that most of data clearly shows that changes in price do not follow changes in search volume, but it's the other way around. Increase in price usually predicts future increase in the search volume. I know it sounds stupid and boring, but that's the fact so far. +1. this is exactly the way it works. YES exactly. Thanks for pointing this out. Tired of the ol' physics argument... it doesn't work for markets That is how it worked in the past. But if a big media 'event' is sudden it can hit before corresponding price increase imo. Also if the news is about the price increase it has to come after the increase and that's what a lot of the news was last time we had a ton of news. yes, there are no hard and fast rules. these relationships can change. Title: Re: Search Volume as a Forecasting Indicator Post by: Raize on September 06, 2012, 09:35:09 PM According to that graph, EURUSD and USDJPY seem to tank in mention on the weekends.
Title: Re: Search Volume as a Forecasting Indicator Post by: niko on September 06, 2012, 10:53:03 PM If you look at the graphs, you'll find that most of data clearly shows that changes in price do not follow changes in search volume, but it's the other way around. Increase in price usually predicts future increase in the search volume. I know it sounds stupid and boring, but that's the fact so far. +1. this is exactly the way it works. YES exactly. Thanks for pointing this out. Tired of the ol' physics argument... it doesn't work for markets That is how it worked in the past. But if a big media 'event' is sudden it can hit before corresponding price increase imo. Also if the news is about the price increase it has to come after the increase and that's what a lot of the news was last time we had a ton of news. yes, there are no hard and fast rules. these relationships can change. Just hope that this thread will dispel the myth of increased search volume as a generally bullish sign. So far that has not been the case. If we believe this busted myth, people will start buying in anticipation, thereby raising the price - a rather silly self-fulfilling prophecy that always fails in the long run (unless the fundamentals change in the meantime - completely unrelated). |
