Mood Index and Price Dynamics [based on Reddit and Telegram data] - See the full report for sentiment-analysis and data-methodology.

Introduction

The relationship between social media sentiment and cryptocurrency price movements has become increasingly significant in understanding market dynamics. This study presents a comprehensive analysis of Nodiens's sentiment metrics and their correlation with price movements across major cryptocurrencies (including separate Lead-Lag analysis of daily changes of Mood Index and price returns), drawing from extensive data collected by Nodiens from Reddit and Telegram platforms between December 2021 and December 2024.

Our research explores how social media sentiment indicators precede and correlate with price movements across various cryptocurrencies and timeframes. By conducting rigorous statistical analyses, we evaluate the price-predictive value of the Nodiens Mood Index and its varying impact on different cryptocurrency types. The study employs a range of analytical methods, including Granger causality tests, lead-lag correlation analyses, and rolling window correlations, to uncover and understand these complex relationships. By analysing social media sentiment patterns across multiple platforms and time horizons, we identify distinct groups of cryptocurrencies that exhibit varying Mood-price relationships from the angle of daily changes of mood and prices. This analysis provides valuable insights into how different market segments interpret and respond to social media sentiment, offering implications for both market understanding and the development of trading strategies.

The findings from this research deepen our understanding of cryptocurrency market efficiency by shedding light on the role of social media sentiment in price dynamics. Additionally, they offer practical insights for market participants looking to integrate the Nodiens Mood Index into their decision-making processes, enabling more informed tradingstrategies and risk management approaches.