This article Using Twitter for Cryptocurrency: Get an edge over your fellow traders is a summary on how to use Twitter successfully when trading or investing in cryptos.
With the new era of Cryptos come a new media. Twitter was meant for the graveyard – user numbers were falling and profitability of the company was dropping too. It almost looked like Twitter was soon become an acquisition target.
Then came Crypto. Crypto literally saved Twitter, because now it has become the preferred means of communication between traders and investors. Instead of using Facebook or other platforms, Twitter’s feed can be almost instantaneously updated, which was a huge advantage in the world of Crypto where things move at light speed.
As such, the community has come to a consensus that Twitter (and Reddit) will be their place of ‘residence’.
For those who are unfamiliar with Twitter. Think of Crypto Twitter like your very own Bloomberg terminal at your fingertips. In the Bloomberg terminals which are usually found in banks and trading desks, the news are updated and the charts are live all the time. Twitter is the same, but even faster!
As such, this article will explore various ways you should use Crypto Twitter so that you can do better in your investing and trading journeys.
Where traditional media has always relied on centralized news corporations to bring you the news. CNN, CNBC, MSNBC, Fox News, and in Asia, Channel NewsAsia, Today, SCMP and so on. These news corporations have many layers of hierarchy and anything posted usually has to go through an editor.
So, the editor decides what you read, and what angle you will read it. The editors, or filters, of the new Crypto generation are the twitter influencers.
Generally speaking, there is no definition for what an influencer means or how many followers it entails, but I would say an account with more than 30K followers is able to influence opinion in some way.
You follow influencers not because their views are always valid and 100% correct. However, many of these accounts are also value-adding, which is why people follow them in the first place.
Sometimes, they will post useful articles or technical analysis that may give you insight into how the market or a particular coin may behave. This, of course, should be taken with a pinch of salt, as this is only one person’s opinion. But crypto being such a small market, small comments from these influencers may cause people to either buy out of greed or sell out of fear.
One famous account, Wolf of Poloniex posted this tweet in September last year when China announced a clampdown on ICOs.
Naturally, this caused a lot of panic and anxiety, or FUD among people, especially those new to the crypto market. Eventually he was proven wrong as the market reversed and proceed to go to all-time highs. But the point is that these people can shift sentiment with simple tweets like that.
Follow Coins (and related)
On Twitter, you can also follow what they say about particular coins by adding a ‘$’ sign in front of the coin symbol. For example, if you wanted to find everything about Ethereum (ETH), you can type $ETH on the search bar and all results from people typing anything related to ETH will turn up.
This is especially helpful if you want to find coin-specific news or analysis. People who post things related to that coin will add a ‘$’ in their coin symbol so that people like you and me can find the filtered news. This is one way to start adding to your follow list – if you hold a particular coin, it is good you follow all the verified or influencer accounts that tweet about the coin so you can keep up with it.
Another useful tip if you are researching for coin specific news. Sometimes when you type, say $ETH, many spam accounts will turn up. These accounts add tens of coins in the same tweet with the purposes of getting you to click on their links. Here’s an example.
And here’s how you can get rid of it: Type in -$XRP, for example, after your $ETH tweet so you don’t see a tweet that has $ETH and $XRP. Usually what I do is to add a whole list of -$ like below.
That way, I can avoid most spam accounts that try to get me to click on their links.
Read Sentiment (FOMO or FUD)
Twitter is most useful for you to gauge market sentiment. Is the market FOMO-ing (greedy)? Or is the market FUD-ing (fearful)?
This will be helpful for you to gauge best times to buy and sell. Generally speaking, when markets are too elated, it might be time to leave. And when markets are depressed, those are probably good times to buy.
By reading your twitter feed (after you have followed enough influencers), you will be able to have a good gauge on what people are feeling at the moment. Those influencers, while just one person, often reflect the broader sentiment of the crypto market.
If you’re able to time your trades right – you don’t have to be a genius technical analysis to profit from the market. You can just ‘be greedy when others are fearful, and fearful when others are greedy’.
Crypto markets move at light speed. What happens in a month in the stock market can potentially happen to the twitter market in a single day. For example, 10% swings of the crypto market is normal, but if it happened in the stock market, people will be calling it a ‘financial crisis’.
What’s more, there are no breaks for crypto – it is open 24/7. If the market news comes on a weekend, there will be no one at Bloomberg or CNBC alerting you in a moment’s notice. You’ve got to wait till monday, till the 500 word article gets vetted and approved before you read about it. Nothing wrong with that, it’s just that the market would have been light years ahead already in a few days’ time.
Crypto Twitter is the place to be, and likely will be in the years to come.
How do you use Twitter to do your crypto analysis? Leave your comments in the section below!