Sentiment Matters for Cryptocurrencies: Evidence from Tweets
This study provides empirical evidence that cryptocurrency market movements are influenced by sentiment extracted from social media. Using a high frequency dataset covering four major cryptocurrencies (Bitcoin, Ether, Litecoin, and Ripple) from October 2017 to September 2021, we apply state-of-the-a...
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MDPI AG
2025-04-01
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| Online Access: | https://www.mdpi.com/2306-5729/10/4/50 |
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| author | Radu Lupu Paul Cristian Donoiu |
| author_facet | Radu Lupu Paul Cristian Donoiu |
| author_sort | Radu Lupu |
| collection | DOAJ |
| description | This study provides empirical evidence that cryptocurrency market movements are influenced by sentiment extracted from social media. Using a high frequency dataset covering four major cryptocurrencies (Bitcoin, Ether, Litecoin, and Ripple) from October 2017 to September 2021, we apply state-of-the-art natural language processing techniques on tweets from influential Twitter accounts. We classify sentiment into positive, negative, and neutral categories and analyze its effects on log returns, liquidity, and price jumps by examining market reactions around tweet occurrences. Our findings show that tweets significantly impact trading volume and liquidity: neutral sentiment tweets enhance liquidity consistently, negative sentiments prompt immediate volatility spikes, and positive sentiments exert a delayed yet lasting influence on the market. This highlights the critical role of social media sentiment in influencing intraday market dynamics and extends the research on sentiment-driven market efficiency. |
| format | Article |
| id | doaj-art-fb074f82736346fea853ea24010356f8 |
| institution | OA Journals |
| issn | 2306-5729 |
| language | English |
| publishDate | 2025-04-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Data |
| spelling | doaj-art-fb074f82736346fea853ea24010356f82025-08-20T02:17:25ZengMDPI AGData2306-57292025-04-011045010.3390/data10040050Sentiment Matters for Cryptocurrencies: Evidence from TweetsRadu Lupu0Paul Cristian Donoiu1Department of International Business and Economics, The Bucharest University of Economic Studies, 010374 București, RomaniaDepartment of International Business and Economics, The Bucharest University of Economic Studies, 010374 București, RomaniaThis study provides empirical evidence that cryptocurrency market movements are influenced by sentiment extracted from social media. Using a high frequency dataset covering four major cryptocurrencies (Bitcoin, Ether, Litecoin, and Ripple) from October 2017 to September 2021, we apply state-of-the-art natural language processing techniques on tweets from influential Twitter accounts. We classify sentiment into positive, negative, and neutral categories and analyze its effects on log returns, liquidity, and price jumps by examining market reactions around tweet occurrences. Our findings show that tweets significantly impact trading volume and liquidity: neutral sentiment tweets enhance liquidity consistently, negative sentiments prompt immediate volatility spikes, and positive sentiments exert a delayed yet lasting influence on the market. This highlights the critical role of social media sentiment in influencing intraday market dynamics and extends the research on sentiment-driven market efficiency.https://www.mdpi.com/2306-5729/10/4/50cryptocurrenciessentimentTwitterliquidity |
| spellingShingle | Radu Lupu Paul Cristian Donoiu Sentiment Matters for Cryptocurrencies: Evidence from Tweets Data cryptocurrencies sentiment liquidity |
| title | Sentiment Matters for Cryptocurrencies: Evidence from Tweets |
| title_full | Sentiment Matters for Cryptocurrencies: Evidence from Tweets |
| title_fullStr | Sentiment Matters for Cryptocurrencies: Evidence from Tweets |
| title_full_unstemmed | Sentiment Matters for Cryptocurrencies: Evidence from Tweets |
| title_short | Sentiment Matters for Cryptocurrencies: Evidence from Tweets |
| title_sort | sentiment matters for cryptocurrencies evidence from tweets |
| topic | cryptocurrencies sentiment liquidity |
| url | https://www.mdpi.com/2306-5729/10/4/50 |
| work_keys_str_mv | AT radulupu sentimentmattersforcryptocurrenciesevidencefromtweets AT paulcristiandonoiu sentimentmattersforcryptocurrenciesevidencefromtweets |