The Impact of Twitter Sentiment Analysis on Bitcoin Price during COVID-19 with XGBoost

Abstract

Bitcoin have become safe-haven for people who want to invest during COVID-19 with its volatile price. Numerous factors can affect the price but recently the most popular one was due to an Elon Musk tweet. We decided to investigate our questions. Do tweets regarding Bitcoin affect its price? Can we predict Bitcoin price by analysing sentiments from twitter? For our research, we decided to analyze the impact of twitter sentiments on Bitcoin price during the COVID-19 pandemic. Using VADER sentiment analysis, we attempted to find out what is the current public sentiment regarding Bitcoin. Coupling tweet sentiment with the Bitcoin price, we pursue making a predictive model to forecast whether Bitcoin price will rise or fall. We also compare whether having twitter sentiment analysis in our model will have an advantage compared to not using. In the end, we found out that twitter sentiment analysis have an impact to Bitcoin price. We hope that our research can help people during this financial stress period.