To understand the market’s sentiment, you’ll need to collect the market participants’ views, ideas, and opinions. Again, while it can be helpful, you should not rely solely on market sentiment analysis. You could rather use the information collected in combination with your existing knowledge and experience before drawing actionable conclusions.
Social channels are just the first step. You can use many methods to get a broad overview of market sentiment. On top of monitoring social channels (particularly Twitter, given its popularity among cryptocurrency fans), you might consider the following:
1. Track social mentions with data collection software tools.
4. Check market sentiment indicators and pricing signals on CoinMarketCap. These indexes analyze a range of different sources and provide easy summaries of current market sentiment.
5. Measure the level of hype surrounding a cryptocurrency with Google Trends. For example, a large search volume for “How to sell crypto,” could suggest that the market sentiment is negative.