AI meets cryptocurrencies: the first business-grade crypto market sentiment analysis for retail investors
NapoleonX, the first fully algorithmic, decentralized and scalable crypto-asset manager, and SESAMm, a French fintech specialized in Big Data and artificial intelligence, are proud to announce their partnership around L’Humeur des marchés (The Markets’ Mood), a revolutionary platform for predictive sentiment and emotions data on financial assets.
Sentiment and emotions analysis are now freely accessible on NapoleonX platform for Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization. It’s the first time that such a cutting-edge tool designed for finance professionals is made available for free to retail investors and the general public.
The importance of sentiment in financial markets
With the continuing rise of passive and quantitative trading, news and social media are driving the investment and risk management process more than ever. Indeed, investing in the financial markets nowadays without paying attention to sentiment can significantly affect one portfolio’s performance.
This is even truer in the crypto market, which is still of modest size ($300bn) and where most of the money still comes from individual investors. A recent study has just demonstrated once again how Bitcoin price is linked to public sentiment on social media and how, ‘by following the [silent majority] comments, you get a much more accurate prediction of Bitcoin’s price over time.’
Stevens School of Business professor Feng Mai, leading a four-university team, analyzed 3.3 million tweets and 344,000 posts to verify social media’s effect on cryptocurrency.
SESAMm’s groundbreaking solutions have been specifically designed to answer these new challenges of the asset management industry and to follow financial markets more accurately. If leading financial companies already offer market sentiment data, professional solutions were restricted to major financial institutions such as asset managers and hedge funds until now. Thanks to NapoleonX, sentiment analysis is now available to individual investors and the general public. What’s more, for free!
Bringing Big Data, AI and NLP to the Crypto World
L’Humeur des Marchés is a data visualization platform providing predictive sentiment and emotions data on financial assets. It focuses on SESAMm’s unique expertise in Big Data, machine learning, Natural Language Processing (NLP) and quantitative analysis. By using NLP, a specific application of Artificial Intelligence focused on textual information, L’Humeur des Marchés performs real-time linguistic analysis in online news, forums, blogs, social media and trading platforms and analyzes these sources to extract opinion, sentiment and emotions data linked to financial assets.
Streamlined viewing in two dimensions of emotions classification process using SESAMm NLP algorithms, each dot represents a different word.
Technical features include:
- Access to BTC and ETH currencies with
NapoleonXpartnership; Data setsoriginated from 250,000 sources of data, including social media (such as Twitter), social trading platforms (Stocktwits…), news, blogs, and forums (such as Reddit);
- Textual data from 8 languages: English, French, German, Spanish, Portuguese, Italian, Chinese, and Japanese;
- Mention-based asset analysis with several filters, providing
fine grainedand accurate results — instead of analyzing an article as wholewhich would be too coarse-grained, SESAMm analyzes each mention in the text, which is especially relevant for long articles providing multiple points of views.
- One year of live and historical data available.
How to use it
By transforming Big Data into smart data, L’Humeur des Marchés will give you an understanding of the opinion, sentiment
- Sentiment is either positive, negative or neutral.
- Emotions range from joy to sadness through anger, fear
- Trading opinion takes the form of a bullish/bearish score.
Overview of the markets’ mood on NapoleonX platform.
Each data set is divided into two sections:
- “Socials” for indicators extracted from social media sources (social trading platforms and social networking websites);
- “News” for indicators extracted from more traditional sources (financial news, blogs and forums).
This brand new feature is displayed here to help you decide on your discretionary trading as a complementary tool to fundamental analysis, technical analysis and quantitative trading signals such as the one NapoleonX already provide, both for traditional and crypto assets.
As traders or investors, we all know it is difficult to analyze or to grasp the sentiment on a particular market. This is due to a large number of available information accessible everywhere, which lead us to believe that such a cutting-edge tool would be of great use to you. The goal is to produce innovative trading crypto strategies relying on this alternative set of data.
Sentiment indicators are typically used to forecast market trends or volatility. For example, huge values of fear or surprise tend to indicate a future increase in volatility, which you should be careful with in order to preserve your assets. In addition, while a high positive sentiment is usually a good sign for a crypto-asset, you should be careful with increases that are very rapid as they may indicate that a market bubble is likely to appear.
While trading on sentiment might prove difficult and unrecommended to be done on this basis alone, conversely trading while ignoring sentiment, and especially extreme movements, can be detrimental to your portfolio and your performance. So use this as an information tool when you make your analysis and before taking any decision. The advantage provided is that it covers all the media you could ever think of, in 8 different languages, saving you a lot of time and making you a better-informed investor.
Bringing the most innovative tools to NapoleonX community
Thanks to L’Humeur des Marchés, NapoleonX’s community will be able to more effectively identify and understand the behavioral biases that exist especially in the crypto market, to anticipate trends and to build innovative behavioral investment strategies, thus diversifying their sources of alpha for crypto-assets.
Unlike a lot of AI tools that may be around, this platform has been developed over the last 4 years, representing a considerable amount of work dedicated to making AI learn. SESAMm provides its technologies to some of the greatest funds worldwide, including for trading other assets such as indices, equities, commodities, forex and bonds. With such a unique expertise, leveraging a technology which has already proven to be efficient for many asset classes is the most effective approach to be done.
By adding this new feature for their community, NapoleonX goal is to add value to our platform for all their users and to fulfill their commitment to continuous innovation. L’Humeur des Marchés will take its natural place on the NPX platform among the features already made available to retail investors: trading signals for traditional and crypto assets, market data, financial & crypto news, in-depth articles on finance, blockchain and cryptocurrencies.
This opportunity was not part of NapoleonX initial plan but they strongly believe in adding valuable tools and information to their platform in order to offer its community a more refined, effective and innovative service, while increasing traffic and time spent there. This new step they are making is similar to the two additional crypto strategies that were added recently to the first 10 that were marketed during NapoleonX’s ICO campaign.
The Markets’ Mood will be provided for free initially for everyone on NapoleonX’s platform. Depending on the usage and medium-term value, this service might be integrated into one of their membership program (platinum, gold or silver) later on — but this option would only be considered once their first investment vehicle (DAF) has been launched.
So what’s the market’s mood today? Find out now and start building your trading strategy with SESAMm and NapoleonX!