Crypto markets are extremely volatile and cryptocurrency prices tend to fluctuate much more than stock prices. Therefore, automatic algorithm trading is a sensible solution. The goal of this project is to build an intelligent agent that enables constant communication with the crypto exchanges and uses its analyses to execute trades.
Since supply and demand usually dictate the price of any cryptocurrency, the biggest problem is how to determine its real value. In the case of company shares, fundamental analysis can be used to determine the value of the company, its products and its workforce. Based on that, the stock value of the company shares can be determined. When it comes to cryptocurrencies, fundamental analysis often fails or can only evaluate the potential of a product. For this reason, this Master's degree aims to explore the possibility of predicting cryptocurrencies’ price movements by means of a technical and Twitter analysis.
Our main goal is to build an intelligent agent where users can follow the chosen cryptocurrency prices and also check various technical analyses or machine learning forecasts. The intelligent agent also supports both the general Twitter sentimental analysis as well as the sentimental analysis of a specific influencer.
The intelligent agent supports several simple trading algorithms, which execute trades in crypto tokens based on the above mentioned analyses. The technical-analysis-based trading algorithms are the result of the economists’ suggestions, whereas the Twitter algorithms are based on the tweet sentiment of a specific influencer. The results of the strategies have been analysed and presented in several chosen trading simulations.