01 Feb Google Searches Spell Disaster for Bitcoin
The correlation between Google search and price movement
Analysts are now supporting their predictions using the Google search volume. Their assumptions are purely based on the number of people putting the bitcoin keyword into Google Search. According to estimates, Google search for bitcoin soared sharply in December. The worldwide searches for bitcoin tripled in December compared with the previous month. The strategy looks to be effective, considering the correlation between price movement, trading volume, and google searches.
Colas, the first analyst to follow bitcoin said, “Google search patterns can forecast bitcoin’s future. He said he uses Google Trends to track how many people enter “bitcoin” into the search engine.”
The growth in bitcoin popularity also supported the growth in numbers of wallets. However, Google search volume for bitcoin declined sharply by 75% in January and as it declined so did market value.
Source Image: coinmarketcap.com
The popularity of Bitcoin (BTC) continues declining since the start of this month after hitting its peak in December ($19,000). It has fallen back to below $10,000. As expected, the movement in Google search volume reflected the bitcoin price movement.
So, why are popularity and price going down?
Several factors contributed to the decline in bitcoin’s popularity; negative comments from numerous leaders and Central Banks during World Economic Forum weighed on traders sentiments and potential buyers. A Crack-down on digital currency from South Korea, India and China has also impacted the trading volume. South Korea and China have banned cryptocurrency trading through anonymous accounts, amid the threat of criminal activities and during the budget presentation speech, the Indian finance minister clearly denounced cryptocurrencies;
“The government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities.”
Market pundits are also blaming other blockchain technologies for the decline in bitcoin’s popularity. For instance, several payment services companies are showing their confidence in Ripple (XRP) and other blockchain technologies, due to faster transactions times than bitcoin.
Stripe, the online payments company, announced it would not support Bitcoin anymore, citing a number of reasons for this move.
Stripe said, “Bitcoin transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions. … By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount. … Furthermore, fees have risen a great deal … making Bitcoin transactions about as expensive as bank wires.”
Featured Image: twitter