In a previous article, we demonstrated KLCI price forecast
using Google Trends’ Data (Read
more here). This week, we are
going to examine the relationship between Bitcoin Price and its search
frequency on Google.
Google Trends (Read more here) is a
website by Google that analyzes the popularity of top search queries in Google
Search across various regions and languages. The website uses graphs to compare
the search volume of different queries over time (source: Wikipedia).
The following chart shows the relative query frequency of
the term “Bitcoin” in Google Search and the Bitcoin price from Jan 2016 to Sep
2018. The blue line is the normalized
“Bitcoin” search term frequency while the orange line is the normalized Bitcoin
price. There is a very strong
correlation between these two parameters.
This could be due to Bitcoin traders or investors who are internet savvy
at the same time. Speculators may
monitor the “Bitcoin” search term frequency to predict the next movement of the
Bitcoin price.
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