Exploring Key Properties and Predicting Price Movements of Cryptocurrency Market

[mike1821]

If you are investing in bitcoin BTC or crypto you may be interested in the below open access article.

Exploring Key Properties and Predicting Price Movements of Cryptocurrency Market Using Social Network Analysis
https://ieeexplore.ieee.org/document/10521656

Abstract:
The emerging cryptocurrency market is one of the largest financial markets in the world, with a market capitalization that is already surpassing the gross domestic product of many developed economies. Cryptocurrencies are increasingly being adopted as a means of transaction and ownership in the digital domain, particularly in areas like decentralized finance and non-fungible tokens. Known for its high volatility, this market offers investors the potential for higher returns than traditional financial markets like stocks, foreign exchange, and commodities. However, it remains underexplored in academic research. In this paper, we propose the use of social network analysis to effectively model and analyze the cryptocurrency market and conduct a comprehensive numerical study to explore its key properties, including correlation structure, topological characteristics, stability, and influence. Furthermore, we propose the use of centrality measures as novel indicators to improve the accuracy of cryptocurrency price movement predictions. Our research introduces a novel method for understanding and navigating the cryptocurrency market, enabling investors to integrate advanced analytical tools into their decision-making processes.

[Davidvictorson]

Having shared this paper which I want to believe you are one of the coal authors, you should have gone further to put your thoughts in bullet points. Yes it is a research, but what do you think about it? Doing so, makes it easier for a non academic who is interested in Bitcoin to understand what you mean in everyday language.

[Doan9269]

A lot had been talked already concerning bitcoin market price and more will still be discovered, we can explore the bitcoin network market and price from its chart and how we could discover the various means through which we could take or use in speculating on the market before investing, this is believed as the major areas of focus expected of us to consider before making any other further or necessary continuing decision on bitcoin.

[kryptqnick]

I like academic papers because they add a certain degree of credibility to discussions. The authors are postulating a positive moderate correlation between cryptos overall most of the time, with stronger correlation following undesirable critical events (Mt Gox bankruptcy, the pandemic announcement, Tesla stopping accepting BTC as payment, etc.). That being said, the impact of corrections takes a short period of time, so long-term benefits are still possible.
As for the point about centrality measures being effective for price predictions, I must admit that part was too technical to me, so perhaps I misunderstood it. Am I correct that it's not about predicting what Bitcoin will cost in 6 months, for example, but more about how a price change in one of the key cryptos can impact the prices of other currencies?

[btc78]

Exploring Key Properties and Predicting Price Movements of Cryptocurrency Market Using Social Network Analysis
https://ieeexplore.ieee.org/document/10521656

An academic paper about crypto will legitimize crypto in the academic setting and will give way for more official studies to be made in the future. For those who do not want to read through the entire thing, these are the points of the paper:

They aim to analyze relationships or correlations among cryptocurrencies using social network analysis

Social network analysis (SNA) is a methodology for the in-depth study of relationships and interactions between individuals, groups, or organizations within a social system. Its main goal is to map and analyze complex patterns of connections, nodes, and interactions, providing valuable insights into the structure and dynamics of social networks

Through their methodology, they have found that there is indeed a correlation between the prices of one cryptocurrency to another. Meaning a rise of one currency will likely influence the price of the other.

As centrality measures aim to identify cryptocurrencies capable of influencing the prices of other cryptocurrencies in the market, we believe this influence can be a useful predictor of short-term cryptocurrency prices, which is of interest to investors looking for price increases or decreases in cryptocurrency markets.

Most investors probably already know this but a proper research with the right resources, methodology and a formal format allows for a more cohesive information to be distributed among the research community and by extension the community.