Google Trends is an useful tool in trading that help you analyze current popular trends. Especially when FUD and FOMO are still drive the trend of cryptocurrency market, Google Trends would help you easily keep track of the trend and investor psychology.
For example, if you try to follow BTCUSD on the Google Trends chart (Figure 1), over the course of 12 months, BTCUSD price have the same movements to the searching trend of its term - “BTCUSD” - on Google globally. The diagram below will illustrate how to use Google trend as a tool to predict BTC trend.
https://ibb.co/mNTq6JIn this chart, we will use a small trendline to gauge growth in the global BTCUSD trend. Once the search trend is too high, it means that Bitcoin is being overwhelmed by Fomo. The market then is more like a bubble and it's time to close the buy order or make a short sale.
https://ibb.co/nNMtRJChart 2 (in Figure 2) has another trendline above the red line. At this point, the search trend for Bitcoin will be divided into two: one above the Bubble zone which is the “bubble” time of BTCUSD; and one below the Bubble zone and close to the red line, which is the best time to buy.
In general, Google Trends is an effective tool, but it plays a very small role in the critical analysis of the market. To dive deep into the field, you need a lots more than just the Google Trend, for example, social media, network usage, and transaction tools.
Source: Collected
