Redditors, in a humorous attempt to push up bitcoin prices, are trying to fool trading bots that scrape the forum for sentiment. And the results are hilarious.

Reddit’s Crypto Conundrum

The ritual started from a Redditor who proclaimed on Jan. 22nd to “trick the bots by being positive.” The specifics behind his plan:

“Bots use Reddit data as a factor in buying and selling, they’ve ruled this bear market. Let’s try being positive here dumps or pumps doesn’t matter. Post hot words in posts with positive comments.”

This logic seemed to have resonated with Redditors. The thread elicited more than 350 comments in 24 hours, with comments such as “time to get a second mortgage and go all in!”, and “here we go! Buying 20 BTC this is going to the moon. HODL, moon, lambos.”

And, like most things on Reddit, it’s hard to tell who is participating satirically.

Does Hype Drive the Crypto Market?

One Redditor succinctly captured the reasoning behind the stunt:

“Especially in a space like this, where fundamentals are pretty much ignored and market activity is just driven by perception, emotion and sentiment. Hype drives this space, not tech, not progress, not delivery.”

With that notion of “hype” as the driving factor behind cryptocurrency prices, Redditors created the positivity thread to use it for the “greater good,” and harness it to push up underwater cryptocurrency prices.

Understanding Trading Bots

There are a number of different strategies for cryptocurrency (and stock) trading. One of these methods includes using software to aggregate information from social media, such as Reddit and Twitter, and check what the ‘sentiment’ of what people write.

If there’s a lot of positive vernacular (e.g. rich, moon, lambo) then the bot signals that sentiment if positive and gives the trader a ‘buy’ signal. If there’s negative vernacular ( e.g. bags, hodl, rekt) then it gives the trader a ‘sell’ signal.

To visualize this, here is a BTC sentiment chart created based on the daily average sentiment score of a few different social media posts related to Bitcoin:

Chart courtesy of enryod.com

As one can see from the chart, the bot would give a buy signal when sentiment was outside of the average range (e.g. higher than 0.15) and a sell signal when it was below the average range (e.g. lower than 0.05).

Consequently, the Redditor’s positivity illusion is not baseless. By collectively pumping out positive keywords which the bot is looking for, it could possibly fool one of these bots into buying when it normally wouldn’t.

Bring on the Positivity

These positivity posts have become a recurring theme on Reddit r/bitcoin and r/btc, two sub-forums dedicated to bitcoin. Moreover, hundreds of Redditors have participated in these threads, some genuine and some for comic relief.

Some of the more humorous keywords indicating “strong sentiment”: HODL, Lambo, institutional investors, moving in, pump, to the moon, buy the dip, bottom confirmed, leveraged long, and more.

And the Results?

It’s hard to tell. Bitcoin is extremely volatile, and deciphering whether these positivity posts have an impact on price is probably futile.

So for those genuinely trying to impact the price, keep in mind that the effects are likely negligible. However, for those in it for the humor, know that “Bitcoin is going to the moon!”

Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.

Did you like this article? Join us.

Get blockchain news and crypto insights.

Join Us on Telegram

http://platform.twitter.com/widgets.js(function(d,s,id){var js,fjs=d.getElementsByTagName(s)[0];if(d.getElementById(id))return;js=d.createElement(s);js.id=id;js.src=’https://connect.facebook.net/en_US/sdk.js#xfbml=1&version=v3.0&appId=234853770649189&autoLogAppEvents=1′;fjs.parentNode.insertBefore(js,fjs);}(document,’script’,’facebook-jssdk’));


Source link


Please enter your comment!
Please enter your name here