Data show that there seems to be a strong correlation between the number of tweets and the price of Bitcoin and the volume of transactions

Social media indicators, such as the number of tweets referring to a specific cryptocurrency, the number of comments or posts in a cryptocurrency-specific subreddit, and the number of daily searches for a specific crypto topic seem to be closely linked to the price of Bitcoin. Judging from the number of tweets referring to Bitcoin every day since 2017, there was a significant spike during the 2017 bull market. On December 7, 2017, tweets referring to Bitcoin reached an all-time high of 155,600. After this peak, the average number of tweets dropped significantly in 2018 and 2019. This medium-term trend between the number of tweets and the price of Bitcoin may suggest that these two variables are related. Throughout 2017, the correlation between the price of Bitcoin and the number of tweets was the highest at 0.86 (a correlation of 1 means that Bitcoin and tweets are completely positively correlated, while -1 means completely negatively correlated). Despite the bear market in 2018, the relationship between price and number of tweets is still high, with a correlation coefficient of 0.74. In addition, there seems to be a significant relationship between the number of Bitcoin transactions and the number of tweets. On average, in 2017, when the number of tweets in a day increased by 1%, the transaction volume of Bitcoin would increase by 2.5% on that day; in 2018, when the number of tweets in a day increased by 1%, the transaction amount of Bitcoin would increase. The volume increased by 0.64%, and the transaction volume will increase by 0.72% in 2019.