Open AccessForecasting Bitcoin Volatility through On-Chain and Whale-Alert Tweet Analysis using the Q-Learning Algorithm
Author(s) -
Muminov Azamjon,
Otabek Sattarov,
Jinsoo Cho
Publication year - 2023
Publication title -
ieee access
Language(s) - English
Resource type - Journals
ISSN - 2169-3536
DOI - 10.1109/access.2023.3317899
Subject(s) - aerospace , bioengineering , communication, networking and broadcast technologies , components, circuits, devices and systems , computing and processing , engineered materials, dielectrics and plasmas , engineering profession , fields, waves and electromagnetics , general topics for engineers , geoscience , nuclear engineering , photonics and electrooptics , power, energy and industry applications , robotics and control systems , signal processing and analysis , transportation
As the adoption of cryptocurrencies, especially Bitcoin (BTC) continues to rise in today’s digital economy, understanding their unpredictable nature becomes increasingly critical. This research paper addresses this need by investigating the volatile nature of the cryptocurrency market, mainly focusing on Bitcoin trend prediction utilizing on-chain data and whale-alert tweets. By employing a Q-learning algorithm, a type of reinforcement learning, we analyze variables such as transaction volume, network activity, and significant Bitcoin transactions highlighted in whale-alert tweets. Our findings indicate that the algorithm effectively predicts Bitcoin trends when integrating on-chain and Twitter data. Consequently, this study offers valuable insights that could potentially guide investors in informed Bitcoin investment decisions, thereby playing a pivotal role in the realm of cryptocurrency risk management.