Cryptocurrency Price Prediction Based On Google Trends

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The two most expensive cryptocurrencies have increased a tremendous search volume, as Google Trends shows. It is apparent, since overall capitalization of Bitcoin and Ethereum exceeds 230 billion dollars, where more liquid Bitcoin is making up nearly $200 billion of this value. As long as their volatility and trading volume can be predicted by Google Trends, both currencies may be leveraged as investment tools, as some researchers approve. This is largely owing to the concomitant terms which are used on cryptocurrency websites indexed in Google search.

By analyzing the search volume data we reached the point that it predicts a price direction only to some extent. Since Google Trends used as a news source influencing purchase decisions, a webmaster should take this into account and know how to optimize a cryptocurrency website accordingly. In perspective, this may result in wider impact of Google Trends on volatility handing advantage to both bulls and bears, a purchasing or selling trader.

The research presented here helps to solve the issue of predicting cryptocurrency prices changes. It is accomplished by comparing trends in actual web search data and search volume and their corporate input. The resulting outcome is a great indicator for a professional digital marketer.

Google Trends Data’s Impact On Cryptocurrency Market Volatility

Google’s search volume (index) is calculated by dividing each data point by the total searches within a geographic region and time range. When trends data is queried for a period of longer than 90 days the search volume data returned is aggregated at a weekly level.

First, we gathered all web search data for 90 days and compared it with the query of interest for the specified period. Second, we aggregated a weekly search volume to receive a daily search volume. Third, we combined weekly volume with a day volume data for the dates overlapping.

Finally, we have collected Google Trends data that comprises the most popular cryptocurrency terms, such as ”Bitcoin” and ”Ethereum”. However, we avoided using currency’s abbreviation, hence ”BTC” and ”ETH” were out of research interest.

After Google Trends data received, it is properly analyzed to determine what part of it makes the most valuable contribution to the research. It is paramount to adjust only clearest trends that actually influence the market. Some of the Google Trends may be not objective due to their sentiment nature that adds less quality to the research. However, there is a correlation between the cryptocurrencies sentiments and market volatility. If a relationship between these metrics and price changes is not confirmed, they will be excluded.

In the next section you will follow the methodology on how to determine which volume data is valid for the precise volatility prediction.

Cryptocurrency Prices Prediction With Google Trends

We determined a possible relationship between Google Trends search data and cryptocurrency price changes for both Bitcoin and Ethereum. First, we measured crypto market activity with the correlation to the search volume (index). We watched data on daily open, close, high, low and overall market capitalization that matched with the corresponding time frame in Google Trends. Second, we measured trading activity by measuring average weekly traded volume. Third, we measured historical volatility that showed a ratio between a cryptocurrency volatility and search volume.

To ensure these correlation measures would not represent a random chance more sophisticated methodology is necessary. For the time, the research we conducted showed that the crypto pricing is highly correlated with Google Trends data. And this is equally true for both bull and bear markets.

Website Optimization Through The Prism Of Google Trends

Since it has been established, Google remains the world’s most popular search engine processing near as much as 75% of all internet searches. The trick is that Google search data not only can provide necessary information to the trader, but it actually   reshapes the cryptocurrency market on a regular basis. Thus, any adequate website optimization you up to should correlate with search volume data. As long as Google Trends provides information on the popularity of desired queries, this would be the best seo optimization strategy.

However, keep in mind that search term popularity volumes may be compared over specific time periods. This ensures a good metric for the general interest in cryptocurrencies at any given time and any location worldwide. It is easy to follow the relationship with volatility of cryptocurrency prices and general interdependence of all actors.

In addition, consistent cryptocurrency website optimization is heavily influenced by social media that generates emotional background for decisions ranging from yes to no. Such decisions build pathways that often lead in opposite directions, which your audience will obviously avoid. The trend analysis of social media shows that the larger opinions towards some crucial shifts in the blockchain industry influence web search data that allows to predict market changes.

Cryptocurrency Market and Risks It Brings to The table

Due to relatively nontransparent nature of cryptocurrencies, some additional ethical concerns should be taken into account. The market is substantially deregulated, which imposes subsequent risks to precise volatility predictions in Google Trends. Additionally, it should be meant when elaborating cryptocurrency website optimization strategy that unregulated currency could empower fraudulent and harmful intents. Unless you operate in the darknet, your best SEO practices would be to avoid any anonymity.

However, what is more important is that deregulation sabotages clear analysis based on Google Trends search volume. Above mentioned methodology of cryptocurrency price changes prediction could be false due to a large piece of queries going through the hidden networks. On the other hand, this has been the exact purpose of cryptocurrency development and successful distribution among people using cryptocurrencies as a payment tool, not a store of value.

Consequently, Google Trends search volume is a great source of irrevocable data, which is vital for the up-to-date cryptocurrency website optimization. If you have a data scientist at your disposal you are in a win-win situation, as their approach would be drastically more effective.

About the author:

Joe Doe, Cryptocurrency Investor and Digital Marketer. I always use Google rank checker to keep website ranking under control.

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