- Crypto Twitter is a mixed bag when it comes to usefulness
- There are some great traders and plenty of charlatans
- It’s worth paying attention to sentiment on crypto Twitter rather than actual content
Crypto Twitter is something that it is well worth being a part of, if only to keep up with trends in the fast-moving space, but there are some things it’s good for and some things it’s bad for. Some post charts, some post wider thoughts on the space, and some continually bellow that BSV has already won, but what each poster cannot help to do is inadvertently offer their own personal commentary on the sentiment of the market, and it is this sentiment you should be keeping track of rather than the content.
Stay Detached to Content
It’s never a good idea to copy-trade someone, unless you’re only using a small amount as a kind of experiment. That’s not to say that there aren’t good traders on crypto Twitter of course, there are, but there are also a great many charlatans perpetually shoving coins they’ve been paid to shill in your face. Here’s a clue – if the same crypto Twitter trader is forever bullish on the same coin, no matter what it’s price action, the chances are that there is a vested interest somewhere.
There are those, too, that offer interesting macro outlooks on the market – sentiments to weigh up against each other and help you evolve your own understanding of the market. Again, however, don’t get too wrapped up in what one person says, even if they have been right where everyone else has been wrong. As Michael Burry has shown, one swallow does not a summer make.
Use Crypto Twitter to Gauge Sentiment
The one thing that crypto Twitter is really useful for however is gauging sentiment. The trick is to ignore the actual content being posted and look at the sentiment. Is the majority bullish or bearish? Typically, when everyone is bearish and posting charts for prices going magnitudes lower, this is exactly when the markets reverse.
It has happened time and time again – novice investors hold onto their coins all the way down and then sell exactly when everyone else is predicting doom and gloom…only for that to be the time when whales gobble everything up and send the market belting back up again. This type of negative sentiment is typically reflected in the crypto Fear and Greed Index, which always pumps the moment the needle drops to the teens.
So next time you see everyone on your crypto Twitter feed posting McDonalds memes and negative charts or just sniping at each other, take a step back and consider whether this collective despair is about to light the blue touch paper.