Technical analysis is synonymous with trading and investing in cryptocurrencies. Technical analysis is an example of community-driven passion.
After spending hours on technical analysis only to find themselves using Twitter as a source of trading, Joe Vezzani and Jon Farjo decided it was time to reap the power of social media for cryptocurrencies. The idea came up with the idea while working together, using the knowledge and experience they gained in a well-structured traditional business to bring a new product to the market.
According to Vezzani and Farjo in London, it took two years of trial and error before they settled on the idea for LunarCrush. They set out to make sense of the social media data that they have been gathering and use it to determine the overall trends in the criptocurrency market.
Farjo said LunarCrush works by surfacing insights from social media. The platform captures around 3 million opinions every day from Twitter, Reddit, Instagram, YouTube, and other social media platforms and uses advanced algorithms to determine their sentiment. The more opinions the platform aggregates, the better it becomes in figuring out what they mean. Every interaction with the community makes LunarCrush and its dataset more reliable and stronger, Farjo said.
This has made LunarCrush one of the best social analytics platforms in the market. The platform allows users to make sense of the billions of social media interactions that occur daily and determine what the broader community thinks.
Farjo said that social analysis is underused, as most traders rely on technical analysis. Technical analysis gives traders an insight into short-term price swings that only some traders might take advantage of. The social analysis provides the foundation that technical analysis is missing.
The community behind a coin is responsible for pushing volumes up or down and pushing prices up or down.
Vezzani noted that tracking community engagement allowed LunarCrush to catch some of the biggest and most promising criptocurrencies projects at their very beginning. Early on, community engagement around Chainlink, Solana and Avalanche was visible on the platform. Early network growth looks like continuous community growth.
Farjo said that community growth is closely linked to the growth in the number of wallets and the growth in the overall number of transactions on a network. The price of its token is going to go up as a result of this.