Crypto Market Trends & TradingView’s Social Sentiment Tools

TradingView is a sophisticated charting platform that caters to many financial markets. The software provides rich price data for cryptocurrencies and various analytical features, such as sentiment tools. But what is sentiment? And how is it used to measure crypto market trends?

What is Sentiment in Crypto?

Sentiment in crypto refers to traders’ or investors’ opinions, emotions and attitudes. It can be targeted at the overall market or at a specific coin. Sentiment in digital currencies is more prominent than that in other assets such as forex and stocks, and it is less influenced by social pressure and hype.

The crypto market is still relatively new and experimental. So it is more speculative and attracts all traders and investors. Memecoins like Dogecoin can produce double-digit percentage moves in a few hours from a simple tweet by Elon Musk. Knowing the sentiment can therefore provide an edge in predicting price movements.

Sentiment tools in crypto tools get their measurements from numerous trading and social sources:

Volatility: The average volatility levels over a certain period of time can indicate specific emotions. A rise may indicate that the market is likely to buy, while a fall may imply that they are likely to sell.
Volume and Momentum: Similar to volatility, sentiment analysts consider volume and momentum over a specified period of time. Higher values ​​indicate a bullish market, while lower values ​​indicate a bearish market.
Polls: Public voting platforms run weekly polls asking thousands of crypto users how they feel about a particular coin or the general market.
Social Media Platforms: Telegram, Twitter/X and Reddit are crypto enthusiasts’ social media platforms. Sentiment analysis will consider specific mentions of a certain coin and common words that imply specific emotions and future actions.
Google: as with searches on the previously mentioned social media networks, search queries on Google also tell a story. Google Trends provides important search volume, which focuses on an increase in specific queries over others and what this implies sentimentally.

Users can consider sentiment analysis from advanced platforms built for this purpose, such as LunarCrush, Santiment, Messari, IntoTheBlock and Token Metrics.

The sentiment tools on TradingView

The sentiment indicators on Trading are all custom built by dedicated users in its community. Although it offers a wide variety, choosing the best tool becomes challenging. Often traders will find multiple versions of the same type of sentiment indicator.

So one should explore the options that offer the most optimal results based on their analysis and experience.

Below are some of the sentiment tools you can use on TradingView.

Crypto Fear and Greed Index

The Fear and Greed Index is a popular sentiment tool used in many traded assets and is the most consistently accurate in cryptocurrencies. It uses the concepts of fear and greed to determine sentiment.

Fear represents a sign of worried investors, which means a buying opportunity. On the other hand, greed indicates a sign of greedy investors, which is likely to lead to selling opportunities.

While the index is heavily weighted to Bitcoin, it is a relatively accurate view of the entire crypto market. After all, most coins follow the price of Bitcoin at any given time. Most sentiment instruments in crypto also rely on Bitcoin.

The index represents the sentiment using a 0-100 scale. Readings from 0 to 50 imply fear (0–25 is extreme fear); 50 is neutral; readings between 50 and 100 indicate greed (75–100 is extreme greed).

Bitcoin leverage sentiment

This sentiment indicator focuses on sentiment analysis by Bitcoin leveraged positions in crypto futuress. The latter is a market where individual and large players (institutions) speculate on the future prices of various coins with expiration dates.

This sentiment indicator uses Z-score analysis to compare leveraged long and short positions. It feeds this data onto an oscillating chart, helping traders spot potential reversals or trend continuations.

BTC Twitter Sentiment

This sentiment tool considers Bitcoin-related tweets (in conjunction with tweets mentioning other popularly traded coins) from IntoTheBlock. It presents this information in red (negative), white (neutral) and green (positive) colors. The goal is to see if there are mainly negative, positive or neutral mentions of Bitcoin on X (formerly Twitter).

Use sentiment tools on TradingView

It is always best to see a basic tutorial or explanation about each sentiment tool before using it on the TradingView App. To apply an indicator to the software:

Once signed in, open a chart.
Click on the ‘Indicators’ tab at the top of your screen.
Search for the full name of the indicator and click on it to apply it to your chart.

Unlike technical indicators, traders should avoid using sentiment to derive buy or sell signals (although some are more technical, such as the Bitcoin Leverage Sentiment tool). Sentiment analysis provides observations about the market’s feelings and the optimal bias to consider.

Traders can match their sentiment findings with their technical and fundamental analysis, ensuring that everyone is singing the same tune before hitting the buy or sell button.

Sentiment remains crucial to understanding crypto trends

Most traders lean towards technical and fundamental analysis, leaving sentiment analysis by the wayside. Yet the latter has much more meaning in the wild, speculative crypto market. TradingView is a capable platform for users to apply their sentiment analysis along with other charting and fundamental skills. This multiple approach is how traders can make the best possible trading decisions.